Comparing zSpace (NASDAQ:ZSPC) & Smith Micro Software (NASDAQ:SMSI)

Smith Micro Software (NASDAQ:SMSI) and zSpace (NASDAQ:ZSPC) are both small-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Volatility and Risk

Smith Micro Software has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, zSpace has a beta of -1.44, suggesting that its share price is 244% less volatile than the S&P 500.

Institutional & Insider Ownership

20.8% of Smith Micro Software shares are held by institutional investors. 34.7% of Smith Micro Software shares are held by company insiders. Comparatively, 8.7% of zSpace shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smith Micro Software	-92.60%	-44.59%	-31.78%
zSpace	-91.13%	N/A	-236.00%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Micro Software	$17.36 million	0.76	-$29.33 million	($3.52)	-0.67
zSpace	$27.86 million	0.15	-$25.39 million	($16.94)	-0.01

zSpace has higher revenue and earnings than Smith Micro Software. Smith Micro Software is trading at a lower price-to-earnings ratio than zSpace, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Smith Micro Software and zSpace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Micro Software	1	0	2	0	2.33
zSpace	1	2	0	0	1.67

Smith Micro Software presently has a consensus target price of $12.50, indicating a potential upside of 427.43%. zSpace has a consensus target price of $75.00, indicating a potential upside of 68,081.82%. Given zSpace’s higher possible upside, analysts plainly believe zSpace is more favorable than Smith Micro Software.

Summary

Smith Micro Software beats zSpace on 8 of the 14 factors compared between the two stocks.

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.

About zSpace

zSpace Technologies, Inc. is a provider of commercial augmented reality and virtual reality technology principally in the education market. The Company offers differentiated hardware along with learning software modules for K-12 science, technology, engineering, game design and mathematics applications, as well as workforce-oriented career and technical education applications. zSpace Technologies Inc. is based in SAN JOSE, Calif.