Reviewing Xperi (NASDAQ:XPER) and SecureWorks (NASDAQ:SCWX)

Xperi (NASDAQ:XPER) and SecureWorks (NASDAQ:SCWX) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility & Risk

Xperi has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, SecureWorks has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Profitability

This table compares Xperi and SecureWorks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xperi	-16.72%	-7.03%	-4.14%
SecureWorks	-25.49%	-5.71%	-3.93%

Valuation and Earnings

This table compares Xperi and SecureWorks”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xperi	$488.88 million	0.72	-$136.61 million	($0.43)	-17.89
SecureWorks	$365.88 million	2.07	-$86.04 million	($0.99)	-8.60

SecureWorks has lower revenue, but higher earnings than Xperi. Xperi is trading at a lower price-to-earnings ratio than SecureWorks, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.3% of Xperi shares are held by institutional investors. Comparatively, 14.4% of SecureWorks shares are held by institutional investors. 2.1% of Xperi shares are held by insiders. Comparatively, 81.5% of SecureWorks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Xperi and SecureWorks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xperi	0	0	2	1	3.33
SecureWorks	1	1	0	0	1.50

Xperi presently has a consensus target price of $19.00, suggesting a potential upside of 146.95%. SecureWorks has a consensus target price of $7.00, suggesting a potential downside of 17.74%. Given Xperi’s stronger consensus rating and higher probable upside, equities analysts plainly believe Xperi is more favorable than SecureWorks.

Summary

Xperi beats SecureWorks on 10 of the 15 factors compared between the two stocks.

About Xperi

Xperi Inc. operates as a consumer and entertainment technology company worldwide. It offers Pay-TV solutions, including UX solutions that allows service providers to customize elements of the interactive program guide for their customers and to upgrade the programming features and services; IPTV, a cloud-based solution that supports various services and applications, such as TV programming, broadband OTT video content, digital music, photos, and other media experiences; managed IPTV service; video metadata and services; managed IPTV Service, a customizable, cloud-enabled, and end-to-end streaming video solution that enables operators to quickly launch a branded, fully compliant, full-featured Pay-TV service; metadata libraries comprising television, sports, movies, digital-first, celebrities, books, and video games; personalized content discovery, natural language voice, and insights; and TiVo DVR subscriptions, as well as technical support service. It also provides consumer electronics solutions, such as home and mobile audio solutions, and silicon and software solutions for edge inference; connected car solutions, including HD Radio and DTS AutoStage; and Media Platform that provides Vewd middleware solutions, TiVo OS, TiVo Stream 4K, connected TVs, and connected cars that leverage the TiVo OS, as well as advertising solutions. The company was incorporated in 2019 and is headquartered in San Jose, California.

About SecureWorks

SecureWorks Corp., through its subsidiaries, provides technology-driven information security solutions for protecting its customers in the United States and internationally. The company's solutions include software-as-a-service solutions; managed security services; and professional services, including incident response and penetration testing services. Its solutions enable organizations to prevent security breaches, detect malicious activity, respond rapidly to security breaches, and identify emerging threats. The company sells its solutions primarily through its referral agents, regional value-added resellers, trade associations, and managed security service providers. It serves customers in a range of industries, including financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. SecureWorks Corp. was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. is a subsidiary of Dell Marketing L.P.