Bazaarvoice (NASDAQ: BV) and Varonis Systems (NASDAQ:VRNS) 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 institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.

Profitability

This table compares Bazaarvoice and Varonis Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bazaarvoice -7.92% -8.34% -4.79%
Varonis Systems -10.04% -25.01% -11.52%

Analyst Recommendations

This is a summary of recent ratings for Bazaarvoice and Varonis Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bazaarvoice 0 0 4 0 3.00
Varonis Systems 0 2 8 0 2.80

Bazaarvoice presently has a consensus target price of $6.44, indicating a potential upside of 39.95%. Varonis Systems has a consensus target price of $42.67, indicating a potential upside of 19.01%. Given Bazaarvoice’s stronger consensus rating and higher possible upside, equities analysts plainly believe Bazaarvoice is more favorable than Varonis Systems.

Valuation & Earnings

This table compares Bazaarvoice and Varonis Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bazaarvoice $201.24 million 1.78 -$4.90 million ($0.19) -24.21
Varonis Systems $185.90 million 5.30 -$13.29 million ($0.63) -56.90

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

Institutional & Insider Ownership

80.1% of Bazaarvoice shares are owned by institutional investors. Comparatively, 64.9% of Varonis Systems shares are owned by institutional investors. 3.4% of Bazaarvoice shares are owned by company insiders. Comparatively, 19.5% of Varonis Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Bazaarvoice has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Varonis Systems has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Summary

Bazaarvoice beats Varonis Systems on 9 of the 13 factors compared between the two stocks.

Bazaarvoice Company Profile

Bazaarvoice, Inc. offers solutions and services that allow its retailer and brand clients to understand that consumer voice and the role it plays in influencing purchasing decisions, both online and offline. The Company’s solutions collect, curate and display consumer-generated content, including ratings and reviews, questions and answers, customer stories, and social posts, photos and videos. This content is syndicated and distributed across its clients’ marketing channels. Its solutions, which the Company provides primarily through a software-as-a-service (SaaS) platform, enable the clients to capture and display consumer-generated content; syndicate that consumer-generated content into its network of brand and retail clients; understand consumer behavior, and monetize the value of that content through targeted advertising based on online and offline shopping behavior. The Company’s geographical segments include Americas, EMEA and Other.

Varonis Systems Company Profile

Varonis Systems, Inc. provides a solutions that protect data from insider threats and cyberattacks. The Company’s products include DatAdvantage, DataPrivilege, Data Classification Framework, Data Transport Engine, DatAnywhere and DatAnswers. Its platform allows enterprises to analyze, secure, manage and migrate volumes of unstructured data. It specializes in file and e-mail systems that store valuable spreadsheets, word processing documents, presentations, audio and video files, e-mails and text. Its Metadata Framework is a technology platform that extracts metadata from an enterprise’s information technology (IT) infrastructure. Data often includes an enterprise’s financial information, intellectual property, and confidential employee, customer or patient records. IT and business personnel deploy its software for a range of use cases, including data security, governance and compliance, user behavior analytics, archiving, search, and file synchronization and sharing.

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