Varonis Systems (NASDAQ: VRNS) and American Software (NASDAQ:AMSWA) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
This is a breakdown of current ratings and price targets for Varonis Systems and American Software, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Varonis Systems currently has a consensus price target of $43.33, suggesting a potential downside of 2.18%. American Software has a consensus price target of $12.25, suggesting a potential upside of 0.66%. Given American Software’s stronger consensus rating and higher possible upside, analysts plainly believe American Software is more favorable than Varonis Systems.
American Software pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. Varonis Systems does not pay a dividend. American Software pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider and Institutional Ownership
82.4% of Varonis Systems shares are held by institutional investors. Comparatively, 75.0% of American Software shares are held by institutional investors. 19.5% of Varonis Systems shares are held by insiders. Comparatively, 13.9% of American Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
Varonis Systems has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, American Software has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.
Earnings & Valuation
This table compares Varonis Systems and American Software’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Varonis Systems||$185.90 million||6.55||-$13.29 million||($0.63)||-70.32|
|American Software||$105.74 million||3.42||$12.37 million||$0.52||23.40|
American Software has higher revenue, but lower earnings than Varonis Systems. Varonis Systems is trading at a lower price-to-earnings ratio than American Software, indicating that it is currently the more affordable of the two stocks.
This table compares Varonis Systems and American Software’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
American Software beats Varonis Systems on 9 of the 15 factors compared between the two stocks.
About Varonis Systems
Varonis Systems, Inc. provides a solutions that protect data from insider threats and cyberattacks. The Company’s products include DatAdvantage, DataPrivilege, Interface Data Unit Classification Framework, Data Transport Engine, DatAnywhere and DatAnswers. Its platform allows enterprises to analyze, secure, manage and migrate volumes of unstructured data. It specializes in file and e-mail systems that store valuable spreadsheets, word processing documents, presentations, audio and video files, e-mails and text. Its Metadata Framework is a technology platform that extracts metadata from an enterprise’s information technology (IT) infrastructure. Data often includes an enterprise’s financial information, intellectual property, and confidential employee, customer or patient records. IT and business personnel deploy its software for a range of use cases, including data security, governance and compliance, user behavior analytics, archiving, search, and file synchronization and sharing.
About American Software
American Software, Inc. (American Software) develops, markets and supports a portfolio of software and services that delivers enterprise management, supply chain and retail planning solutions to the marketplace. The Company operates through three business segments: Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. The SCM segment consists of Logility, Inc. and its subsidiary, Demand Management, Inc. (DMI), both of which provide supply chain and retail planning solutions to trading partners. The ERP segment consist of American Software ERP, which provides business software for manufacturers and distributors, and New Generation Computing, Inc. (NGC), which provides industry-specific business software to both retailers and manufacturers in the apparel, footwear, sewn products and furniture industries. The IT Consulting segment consists of The Proven Method, Inc., an IT staffing and consulting services firm.
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