Financial Analysis: Radcom (NASDAQ:RDCM) & Karooooo (NASDAQ:KARO)

Karooooo (NASDAQ:KARO) and Radcom (NASDAQ:RDCM) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Karooooo and Radcom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Karooooo	0	2	5	0	2.71
Radcom	1	1	1	0	2.00

Karooooo presently has a consensus price target of $73.50, indicating a potential upside of 10.24%. Radcom has a consensus price target of $14.00, indicating a potential upside of 35.00%. Given Radcom’s higher probable upside, analysts plainly believe Radcom is more favorable than Karooooo.

Profitability

This table compares Karooooo and Radcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Karooooo	17.74%	32.03%	19.06%
Radcom	10.47%	6.51%	5.17%

Valuation & Earnings

This table compares Karooooo and Radcom”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Karooooo	$314.11 million	6.56	$56.95 million	$1.97	33.84
Radcom	$71.49 million	2.43	$11.99 million	$0.42	24.69

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

Volatility & Risk

Karooooo has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Radcom has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Institutional and Insider Ownership

48.3% of Radcom shares are owned by institutional investors. 74.7% of Karooooo shares are owned by company insiders. Comparatively, 69.0% of Radcom shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Karooooo beats Radcom on 12 of the 14 factors compared between the two stocks.

About Karooooo

Karooooo Ltd. provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States. The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics. It provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles. In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products. It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices. Karooooo Ltd. was founded in 2001 and is headquartered in Singapore.

About Radcom

RADCOM Ltd. provides 5G ready cloud-native, network intelligence, and service assurance solutions for telecom operators or communication service providers (CSPs). It offers RADCOM ACE, including RADCOM Service Assurance, a cloud-native, 5G-ready, and virtualized service assurance solutions, which allows telecom operators to gain end-to-end network visibility and customer experience insights across all networks; RADCOM Network Visibility, a cloud-native network packet broker and filtering solution that allows CSPs to manage network traffic at scale across multiple cloud environments, and control the visibility layer to perform analysis of select datasets; and RADCOM Network Insights, a business intelligence solution that offers insights for multiple use cases enabled by data captured and correlated through RADCOM Network Visibility and RADCOM Service Assurance. The company also provides solutions for mobile and fixed networks, such as 5G, long term evolution (LTE), voice over LTE, voice over Wifi, IP multimedia subsystem, voice over IP, and universal mobile telecommunication service. It sells its products directly to customers through executives and sales representatives, as well as through a network of distributors and resellers in North America, Asia Pacific, Latin America, Europe, the Middle East, Africa, and Israel. The company was formerly known as Big Blue Catalogue Ltd. and changed its name to RADCOM Ltd. in 1989. RADCOM Ltd. was incorporated in 1985 and is headquartered in Tel Aviv, Israel.