Amplitude (NASDAQ:AMPL) versus Radcom (NASDAQ:RDCM) Critical Contrast

Amplitude (NASDAQ:AMPL) and Radcom (NASDAQ:RDCM) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amplitude	-26.59%	-42.62%	-22.69%
Radcom	10.47%	6.51%	5.17%

Risk and Volatility

Amplitude has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Radcom has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Amplitude and Radcom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amplitude	1	2	7	1	2.73
Radcom	0	2	1	0	2.33

Amplitude presently has a consensus target price of $13.90, suggesting a potential downside of 12.19%. Radcom has a consensus target price of $14.00, suggesting a potential upside of 36.72%. Given Radcom’s higher possible upside, analysts plainly believe Radcom is more favorable than Amplitude.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amplitude	$374.37 million	4.28	-$88.54 million	($0.75)	-21.11
Radcom	$71.49 million	2.40	$11.99 million	$0.42	24.38

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

Institutional & Insider Ownership

73.2% of Amplitude shares are held by institutional investors. Comparatively, 48.3% of Radcom shares are held by institutional investors. 21.6% of Amplitude shares are held by insiders. Comparatively, 69.0% of Radcom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Radcom beats Amplitude on 8 of the 15 factors compared between the two stocks.

About Amplitude

Amplitude, Inc., together with its subsidiaries, provides a digital analytics platform that analyzes customer behavior in the United States and internationally. It offers Amplitude Analytics, which provides real-time product data and reconstructed user visits; Amplitude Experiment, a solution that allows teams to test new capabilities and safely roll out new features; Amplitude CDP, an insight-driven solution that encompasses the data infrastructure, audience management, and data streaming capabilities; and Amplitude Session Replay used by product, marketing, and data teams to understand user behavior, diagnose product issues, and improve product outcomes. The company also provides customer support services related to initial implementation setup, ongoing support, and application training. It delivers its application over the Internet as a subscription service using a software-as-a-service model. The company was formerly known as Sonalight, Inc. and changed its name to Amplitude, Inc. in December 2014. Amplitude, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

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.