iPass (NASDAQ: IPAS) and NQ Mobile (NYSE:NQ) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitabiliy, valuation and risk.

Insider and Institutional Ownership

24.2% of iPass shares are held by institutional investors. Comparatively, 6.7% of NQ Mobile shares are held by institutional investors. 5.7% of iPass shares are held by company insiders. Comparatively, 15.5% of NQ Mobile shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares iPass and NQ Mobile’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
iPass $62.78 million 0.71 -$6.53 million ($0.13) -5.19
NQ Mobile $343.05 million 0.90 $2.27 million ($1.41) -2.49

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

Volatility & Risk

iPass has a beta of -0.38, suggesting that its share price is 138% less volatile than the S&P 500. Comparatively, NQ Mobile has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for iPass and NQ Mobile, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iPass 0 1 4 0 2.80
NQ Mobile 0 0 1 0 3.00

iPass currently has a consensus price target of $2.49, suggesting a potential upside of 269.38%. NQ Mobile has a consensus price target of $13.00, suggesting a potential upside of 270.37%. Given NQ Mobile’s stronger consensus rating and higher possible upside, analysts clearly believe NQ Mobile is more favorable than iPass.

Profitability

This table compares iPass and NQ Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iPass -13.31% -46.92% -26.14%
NQ Mobile -41.05% -0.44% -0.28%

Summary

NQ Mobile beats iPass on 9 of the 13 factors compared between the two stocks.

About iPass

iPass Inc. (iPass), is a provider of global mobile connectivity, offering wireless fidelity (Wi-Fi) on mobile devices. The Company, through its Mobile Connectivity Services segment, offers a cloud-based solution allowing its customers and their users’ access to its global Wi-Fi network to stay connected to the people and information. The Company has categorized its services into two approaches: Enterprise and Strategic Partnerships. Enterprise, formerly Open Mobile Enterprise (OME), focuses on providing mobile connectivity solutions to enterprises, from large to small. Strategic Partnerships, formerly Open Mobile Exchange (OMX), is executed through business development deals intended to open channel distributions for its product to reach the consumer market. Strategic Partnerships include global Original Equipment Manufacturers (OEMs), programs, including credit card companies, software product and service providers, and communication companies.

About NQ Mobile

NQ Mobile Inc. is a global provider of mobile Internet services. The Company provides a portfolio of offerings, including mobile game publishing platforms, mobile advertising platforms, mobile entertainment applications and platforms, mobile security and productivity applications, as well as other mobile applications. It operates through two segments: consumer and enterprise. The consumer segment primarily consists of mobile value added services, which includes mobile security services, mobile games and live mobile social video platform, advertising services and other services. The enterprise segment mainly consists of technology and software development services and hardware sales aggregated under enterprise mobility revenues. It offers a range of products and services to consumers and enterprises. Its product and service offerings provide mobile privacy and productivity, and also offer additional mobile value added services, such as mobile games and other mobile applications.

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