Critical Analysis: Smith Micro Software (NASDAQ:SMSI) vs. NCC Group (OTCMKTS:NCCGF)

NCC Group (OTCMKTS:NCCGF) and Smith Micro Software (NASDAQ:SMSI) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Earnings and Valuation

This table compares NCC Group and Smith Micro Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NCC Group	N/A	N/A	N/A	N/A	N/A
Smith Micro Software	$24.18 million	0.80	-$24.40 million	($5.20)	-0.31

NCC Group has higher earnings, but lower revenue than Smith Micro Software.

Analyst Recommendations

This is a breakdown of current ratings and price targets for NCC Group and Smith Micro Software, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NCC Group	0	0	0	0	0.00
Smith Micro Software	0	0	1	0	3.00

Smith Micro Software has a consensus price target of $5.00, suggesting a potential upside of 206.75%. Given Smith Micro Software’s stronger consensus rating and higher probable upside, analysts clearly believe Smith Micro Software is more favorable than NCC Group.

Insider & Institutional Ownership

20.8% of Smith Micro Software shares are held by institutional investors. 20.5% of Smith Micro Software shares are held by 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.

Risk & Volatility

NCC Group has a beta of -0.05, meaning that its stock price is 105% less volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Profitability

This table compares NCC Group and Smith Micro Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NCC Group	N/A	N/A	N/A
Smith Micro Software	-210.99%	-36.69%	-30.78%

Summary

Smith Micro Software beats NCC Group on 7 of the 10 factors compared between the two stocks.

About NCC Group

NCC Group plc engages in the cyber and software resilience business in the United Kingdom, the Asian-Pacific, North America, and Europe. The company operates in two segments, Cyber Security and Software Resilience. It offers assessment and advisory services, which include risk management, supply chain risk, cloud and infrastructure, application and security software, mobile, managed vulnerability scanning, hardware and embedded systems, and cryptography, as well as calibrator and cyber security review solutions. The company also provides detection and response services, including managed detection and response, incident response, and threat intelligence; compliance services, such as data privacy, government security, and payments; and remediation and big bounty services. In addition, it provides software resilience services, such as cloud software escrow solutions, on-premises software escrow agreements, on-premises software escrow verification, virtual and physical escrow vaults, software security testing, and software risk assessment tools, as well as offers training services to developers and other security teams. The company serves customers in various industries that include finance and professional, transport and manufacturing, public, retail, and energy and utilities, as well as technology, media, telecommunications sectors. NCC Group plc was founded in 1999 and is headquartered in Manchester, the United Kingdom.

About Smith Micro Software

Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.