GSE Systems (NASDAQ:GVP – Get Free Report) and Bandwidth (NASDAQ:BAND – Get Free Report) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.
Risk & Volatility
GSE Systems has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Bandwidth has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
Profitability
This table compares GSE Systems and Bandwidth’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GSE Systems | -17.08% | -137.64% | -34.22% |
| Bandwidth | -3.21% | -1.92% | -0.52% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GSE Systems | 0 | 0 | 1 | 0 | 3.00 |
| Bandwidth | 1 | 3 | 5 | 0 | 2.44 |
GSE Systems presently has a consensus price target of $13.00, indicating a potential upside of 220.20%. Bandwidth has a consensus price target of $25.71, indicating a potential upside of 46.35%. Given GSE Systems’ stronger consensus rating and higher possible upside, equities analysts clearly believe GSE Systems is more favorable than Bandwidth.
Insider and Institutional Ownership
21.8% of GSE Systems shares are owned by institutional investors. Comparatively, 68.5% of Bandwidth shares are owned by institutional investors. 8.2% of GSE Systems shares are owned by company insiders. Comparatively, 6.2% of Bandwidth shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares GSE Systems and Bandwidth’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GSE Systems | $44.79 million | 0.29 | -$8.72 million | ($2.87) | -1.41 |
| Bandwidth | $662.03 million | 0.72 | -$16.34 million | ($1.12) | -15.69 |
GSE Systems has higher earnings, but lower revenue than Bandwidth. Bandwidth is trading at a lower price-to-earnings ratio than GSE Systems, indicating that it is currently the more affordable of the two stocks.
Summary
Bandwidth beats GSE Systems on 9 of the 14 factors compared between the two stocks.
About GSE Systems
GSE Systems, Inc. engages in the provision of professional and technical engineering services, staffing services, and simulation software to clients in the power and process industries in the United States, Asia, Europe, and internationally. It operates in two segments: Engineering and Workforce Solutions. The Engineering segment provides various technical engineering services for ASME programs; and simulation software and services, including operator training systems for the nuclear, fossil fuel power generation, and process industries. The segment also offers in-service testing for engineering programs focused on ASME OM code; in-service inspection for specialty engineering including ASME Section XI; software solutions; mechanical and civil/structural design; electrical, instrumentation, and controls design; digital controls/cyber security; and fire protection solutions for nuclear power plant design modifications. The Workforce Solutions segment supports project lifecycles and provides technical talent and specialty services comprising professional and training services, procedure writing services, and flexible staffing and talent acquisition services for energy, engineering, construction, government, infrastructure, environmental, and manufacturing industries, which include reactor operations instructors, procedure writers, project managers, engineers, work management specialists, planners, and training material developers. The company markets its products and services through a network of direct sales staff, agents and representatives, and strategic alliance partners. GSE Systems, Inc. was founded in 1971 and is headquartered in Columbia, Maryland.
About Bandwidth
Bandwidth is a leading enterprise cloud communications company. Companies like Cisco, Google, Microsoft, RingCentral, Uber, and Zoom use Bandwidth’s APIs to easily embed voice, messaging, and emergency services into software and applications. Bandwidth is the first and only CPaaS provider offering a robust selection of communications APIs built around their own IP voice network.
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