Critical Survey: Qualstar (OTCMKTS:QBAK) & Quantum (NASDAQ:QMCO)

Quantum (NASDAQ:QMCO) and Qualstar (OTCMKTS:QBAK) 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 earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Quantum and Qualstar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quantum	$274.06 million	0.30	-$115.09 million	($2.36)	-2.40
Qualstar	$8.04 million	3.10	-$470,000.00	$0.41	44.03

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

Risk & Volatility

Quantum has a beta of 2.66, suggesting that its stock price is 166% more volatile than the S&P 500. Comparatively, Qualstar has a beta of -0.26, suggesting that its stock price is 126% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Quantum and Qualstar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quantum	1	0	4	0	2.60
Qualstar	0	0	0	0	0.00

Quantum presently has a consensus target price of $13.67, suggesting a potential upside of 141.46%. Given Quantum’s stronger consensus rating and higher probable upside, research analysts plainly believe Quantum is more favorable than Qualstar.

Insider and Institutional Ownership

63.7% of Quantum shares are held by institutional investors. 0.9% of Quantum shares are held by company insiders. Comparatively, 36.0% of Qualstar shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Quantum and Qualstar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quantum	-37.76%	N/A	-21.66%
Qualstar	8.35%	N/A	N/A

About Quantum

Quantum Corporation provides products for storing and managing digital video and unstructured data in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers Myriad All-Flash File and Object Storage Software for high performance enterprise unstructured data applications such as AI, machine learning, and data analytics; Unified Surveillance Platform Software that unified compute and storage for video surveillance recording, storage, and analytics; StorNext Hybrid Flash/Disk File Storage Software for video editing, post-production, and streaming applications, as well as digital file archives; and CatDV Asset Management Software for indexing, cataloging, enriching video, audio, and image files, and workflow orchestration. It also provides ActiveScale Object Storage Software that scalable and durable storage for long term data preservation and protection; DXi Backup Appliances to build backup appliances for high-speed backup and recovery and multisite data protection; and Scalar Tape Storage that secure storage for long term data archiving and offline data protection which are used by hyperscalers and enterprises. In addition, the company sells linear tape-open (LTO) a tape drives for small business data protection and archiving; and LTO media for use in tape storage systems. Further, it offers global support, managed services, customer support agreements, software subscriptions, installation, education, and consulting and training services, as well as Quantum-as-a-Service. The company sells its products through a network of distributors, value-added resellers, direct marketing resellers, original equipment manufacturers, and other suppliers, as well as directly to corporate entities and government agencies. It has a partnership with Tiger Surveillance to deliver end-to-end solutions for long-term retention and archiving of video surveillance data. Quantum Corporation was founded in 1980 and is headquartered in San Jose, California.

About Qualstar

Qualstar Corporation engages in power solutions and data storage systems businesses worldwide. The company operates through two segments, Power Solutions and Data Storage Systems. It provides data storage systems under the Qualstar brand and power solutions under the N2Power brand. The company designs, manufactures, and sells switching power supplies that are used to convert AC line voltage to DC voltages; or DC voltages to other DC voltages for use in various electronic equipment, such as telecommunications equipment, machine tools, routers, switches, wireless systems, and gaming devices. It also supports and sells data storage devices used to store, retrieve, and manage electronic data primarily in network computing environments. The company serves original equipment manufacturers, information technology departments, and lower and middle market companies through distributor and reseller network, distributors, and independent outside sales representatives. Qualstar Corporation was founded in 1984 and is based in Camarillo, California.