Reviewing Digimarc (NASDAQ:DMRC) and SoundThinking (NASDAQ:SSTI)

SoundThinking (NASDAQ:SSTI) and Digimarc (NASDAQ:DMRC) are both small-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for SoundThinking and Digimarc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SoundThinking	2	2	3	0	2.14
Digimarc	1	0	1	0	2.00

SoundThinking currently has a consensus target price of $14.00, suggesting a potential upside of 84.21%. Digimarc has a consensus target price of $15.00, suggesting a potential upside of 3.73%. Given SoundThinking’s stronger consensus rating and higher possible upside, equities analysts clearly believe SoundThinking is more favorable than Digimarc.

Volatility & Risk

SoundThinking has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Digimarc has a beta of 2.19, meaning that its share price is 119% more volatile than the S&P 500.

Profitability

This table compares SoundThinking and Digimarc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SoundThinking	-14.95%	-20.76%	-11.26%
Digimarc	-85.75%	-21.81%	-16.23%

Earnings & Valuation

This table compares SoundThinking and Digimarc”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundThinking	$104.13 million	0.95	-$9.42 million	($1.16)	-6.55
Digimarc	$33.91 million	9.48	-$32.31 million	($1.27)	-11.39

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

Institutional & Insider Ownership

60.7% of SoundThinking shares are owned by institutional investors. Comparatively, 66.9% of Digimarc shares are owned by institutional investors. 10.4% of SoundThinking shares are owned by company insiders. Comparatively, 26.0% of Digimarc shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

SoundThinking beats Digimarc on 10 of the 14 factors compared between the two stocks.

About SoundThinking

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.

About Digimarc

Digimarc Corporation, together with its subsidiaries, provides automatic identification solutions to commercial and government customers in the United States and internationally. The company offers Digimarc Validate protects, a cloud-based record of product authentication information; Digimarc Engage, an interactive communications channel connecting brands and consumers; and Digimarc Recycle. Its solutions are used in various application solutions, such as sorting of consumer-packaged goods in recycling streams. The company offers its solutions through its sales personnel and business partners. Digimarc Corporation was incorporated in 2008 and is based in Beaverton, Oregon.