Analyzing Telos (NASDAQ:TLS) & Unity Software (NYSE:U)

Telos (NASDAQ:TLS) and Unity Software (NYSE:U) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Risk and Volatility

Telos has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Unity Software has a beta of 2.11, meaning that its share price is 111% more volatile than the S&P 500.

Institutional and Insider Ownership

62.1% of Telos shares are owned by institutional investors. Comparatively, 73.5% of Unity Software shares are owned by institutional investors. 14.9% of Telos shares are owned by company insiders. Comparatively, 0.8% of Unity Software shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Telos and Unity Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telos	-8.13%	-2.60%	-1.80%
Unity Software	-28.97%	4.64%	2.16%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Telos and Unity Software, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telos	1	3	3	1	2.50
Unity Software	1	3	18	1	2.83

Telos currently has a consensus price target of $6.42, suggesting a potential upside of 22.92%. Unity Software has a consensus price target of $48.01, suggesting a potential upside of 18.90%. Given Telos’ higher probable upside, research analysts plainly believe Telos is more favorable than Unity Software.

Earnings & Valuation

This table compares Telos and Unity Software”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telos	$164.80 million	2.37	-$36.55 million	($0.21)	-24.86
Unity Software	$1.85 billion	9.61	-$402.77 million	($1.36)	-29.69

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

Summary

Unity Software beats Telos on 8 of the 14 factors compared between the two stocks.

About Telos

Telos Corporation, together with its subsidiaries, provides cyber, cloud, and enterprise security solutions worldwide. The company operates in two segments, Security Solutions and Secure Networks. It provides Xacta, a platform for enterprise cyber risk management and security compliance automation; and consulting, assessment and compliance, engineering and evaluation, operations, and penetration testing services. The company also offers Telos Automated Message Handling System, a web-based organizational message distribution and management for mission-critical communications used by military field operatives; and Telos Advanced Cyber Analytics solution, which is a threat feed source of global Internet Protocol addresses known to engage in potentially malicious activity, including mass scanning and generic opportunistic attacks; and Telos Ghost, a solution to eliminate cyberattack surfaces by obfuscating and encrypting data, masking user identity and location, and hiding network resources, as well as provides security and privacy for intelligence gathering, cyber threat protection, securing critical infrastructure, and protecting communications and applications. In addition, the company provides IDTrust360, an enterprise digital trusted identity risk platform for extending flexible hybrid cloud identity services; and ONYX, a touchless fingerprint biometric solution for mobile devices. Further, it offers secure mobility solutions that enable remote work and minimize operational and security concerns across and beyond the enterprise; and network management and defense services for operating, administrating, and defending complex enterprise networks and services for defensive cyber operations. It serves the United States federal government, large commercial businesses, state and local governments, and international customers. Telos Corporation was founded in 1968 and is headquartered in Ashburn, Virginia.

About Unity Software

Unity Software Inc. operates a real-time 3D development platform. Its platform provides software solutions to create, run, and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. The company offers its solutions directly through its online store and field sales operations in North America, Denmark, Finland, the United Kingdom, Germany, Japan, China, Singapore, and South Korea, as well as indirectly through independent distributors and resellers worldwide. The company was founded in 2004 and is headquartered in San Francisco, California.