Contrasting Forrester Research (NASDAQ:FORR) and PDF Solutions (NASDAQ:PDFS)

PDF Solutions (NASDAQ:PDFS) and Forrester Research (NASDAQ:FORR) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Valuation and Earnings

This table compares PDF Solutions and Forrester Research”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PDF Solutions	$179.46 million	4.61	$4.06 million	$0.03	705.00
Forrester Research	$432.47 million	0.43	-$5.75 million	($4.57)	-2.15

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

Profitability

This table compares PDF Solutions and Forrester Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDF Solutions	0.76%	4.33%	3.19%
Forrester Research	-20.45%	7.40%	3.18%

Institutional and Insider Ownership

79.5% of PDF Solutions shares are held by institutional investors. Comparatively, 55.2% of Forrester Research shares are held by institutional investors. 11.1% of PDF Solutions shares are held by insiders. Comparatively, 40.4% of Forrester Research shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

PDF Solutions has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Forrester Research has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for PDF Solutions and Forrester Research, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDF Solutions	0	0	3	0	3.00
Forrester Research	0	1	0	0	2.00

PDF Solutions currently has a consensus target price of $33.33, suggesting a potential upside of 57.60%. Given PDF Solutions’ stronger consensus rating and higher probable upside, equities analysts plainly believe PDF Solutions is more favorable than Forrester Research.

Summary

PDF Solutions beats Forrester Research on 11 of the 14 factors compared between the two stocks.

About PDF Solutions

PDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that store collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offer data collection and analysis capabilities; and Assembly Operations that provide device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides Design-For-Inspection (DFI) systems, such as DFI On-Chip Instruments; eProbe Non-Contact E-Beam Tool; and Characterization Vehicle (CV) system, which includes CV Test Chips and pdFasTest Electrical Testers, as well as Exensio characterization software, designed to analyze the measurements collected using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. PDF Solutions, Inc. was founded in 1991 and is headquartered in Santa Clara, California.

About Forrester Research

Forrester Research, Inc. operates as an independent research and advisory company in the United States and internationally. The company operates in three segments: Research, Consulting, and Events. The Research segment primary subscription research services include Forrester Decisions, Forrester Research, and SiriusDecisions Research, which are designed to provide business and technology leaders with a proven path to growth through customer obsession. This segment delivers content, such as future trends, predictions, and market forecasts; deep consumer and business buyer data and insights; curated best practice models and tools to run business functions; operational and performance benchmarking data; and technology and service market landscapes and vendor evaluations. The Consulting segment provides consulting projects, include conducting maturity assessments, prioritizing best practices, developing strategies, building business cases, selecting technology vendors, structuring organizations, developing content marketing strategies and collateral, and sales tools; and advisory services. The Events segment hosts events related to business-to-business marketing, sales and product leadership, customer experience, security and risk, new technology and innovation, and data strategies and insights. The company sells its products and services through direct sales force in various locations. Forrester Research, Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.