Critical Analysis: N-able (NYSE:NABL) & Zentek (NASDAQ:ZTEK)

N-able (NYSE:NABL) and Zentek (NASDAQ:ZTEK) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a summary of current ratings and target prices for N-able and Zentek, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
N-able	1	3	4	0	2.38
Zentek	1	0	0	0	1.00

N-able presently has a consensus price target of $9.45, indicating a potential upside of 76.80%. Given N-able’s stronger consensus rating and higher probable upside, analysts clearly believe N-able is more favorable than Zentek.

Volatility and Risk

N-able has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Zentek has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

Earnings and Valuation

This table compares N-able and Zentek”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
N-able	$466.15 million	2.14	$30.96 million	($0.03)	-178.17
Zentek	$1.22 million	56.58	-$7.22 million	($0.05)	-12.84

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

Profitability

This table compares N-able and Zentek’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
N-able	-1.31%	4.17%	2.41%
Zentek	-914.51%	-57.52%	-44.73%

Institutional and Insider Ownership

96.4% of N-able shares are held by institutional investors. Comparatively, 0.8% of Zentek shares are held by institutional investors. 1.5% of N-able shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

N-able beats Zentek on 12 of the 14 factors compared between the two stocks.

About N-able

N-able, Inc. provides cloud-based software solutions for managed service providers in the United States, the United Kingdom, and internationally. The company's solutions enable MSPs to support digital transformation and growth within small and medium-sized enterprises. It provides software platform designed to be an integrated, enterprise-grade solution that serves as an operating system for its MSP partners and scales as their businesses grow. In addition, the company offers remote monitoring and management solutions provide MSP partners with visibility and insights into the availability and performance of their customers' networks, infrastructure, devices and applications through a centralized dashboard; data protection as-a-service solutions, such as backup and disaster recovery for servers, virtual machines, workstations, files, data, and key cloud-based applications, as well as multi-tenant platform and secure remote delivery architecture. Further, it offers security services through patch management, endpoint security, managed detection and response, web protection, e-mail security, and archiving and vulnerability assessment solutions. Additionally, the company engages in professional services automation, automation and scripting management, password management policies and reporting, and analytics. N-able, Inc. was incorporated in 2020 and is headquartered in Burlington, Massachusetts.

About Zentek

Zentek Ltd., together with its subsidiaries, engages in the research and development of graphene and related nanomaterials in Canada. The company develops graphene-based antimicrobial coating under the ZenGUARD brand, surgical masks, HVAC filters, personal protective equipment, rapid detection point of care diagnostics tests, and pharmaceutical products based on graphene-based compounds. It is also developing graphene oxide synthesis and graphene synthesis. In addition, the company owns 100% interest in the Albany graphite project located in Northern Ontario, Canada. The company was formerly known as ZEN Graphene Solutions Ltd. and changed its name to Zentek Ltd. in October 2021. Zentek Ltd. was incorporated in 2008 and is headquartered in Guelph, Canada.