Financial Analysis: ADTRAN (NASDAQ:ADTN) vs. Verify Smart (OTCMKTS:VSMR)

Verify Smart (OTCMKTS:VSMR) and ADTRAN (NASDAQ:ADTN) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Profitability

This table compares Verify Smart and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Verify Smart	N/A	N/A	N/A
ADTRAN	-3.18%	10.94%	1.35%

Insider and Institutional Ownership

80.6% of ADTRAN shares are held by institutional investors. 2.2% of ADTRAN shares are held by 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.

Valuation and Earnings

This table compares Verify Smart and ADTRAN”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Verify Smart	$220,000.00	45.68	N/A	N/A	N/A
ADTRAN	$1.08 billion	1.12	-$45.66 million	($0.39)	-38.36

Verify Smart has higher earnings, but lower revenue than ADTRAN.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Verify Smart and ADTRAN, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Verify Smart	0	0	0	0	0.00
ADTRAN	1	2	4	0	2.43

ADTRAN has a consensus target price of $18.00, suggesting a potential upside of 20.32%. Given ADTRAN’s stronger consensus rating and higher possible upside, analysts clearly believe ADTRAN is more favorable than Verify Smart.

Volatility & Risk

Verify Smart has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Summary

ADTRAN beats Verify Smart on 8 of the 11 factors compared between the two stocks.

About Verify Smart

Verify Smart Corp. provides wireless software solutions focused on IP fraud protection for secure authenticated transactions and celebrity services for fans interactions worldwide. The company's software solutions are delivered as Software as a Service model over the Internet, and allows its clients to access the company's application software and databases. Its products include VerifyNGo, which provides instant personal verification to combat fraud and identity theft through mobile device; and Prvii, a mobile communications service that enables celebrities to monetize their fan base via messaging channels. Verify Smart Corp. promotes its products and services across various markets, including consumer brands, financial services, sports/entertainment, governments, and educational institutions. The company was formerly known as Treasure Explorations Inc. and changed its name to Verify Smart Corp. in March 2009. Verify Smart Corp. was founded in 2006 and is based in Fernley, Nevada.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.