Financial Analysis: Xunlei (NASDAQ:XNET) versus Mitek Systems (NASDAQ:MITK)

Xunlei (NASDAQ:XNET) and Mitek Systems (NASDAQ:MITK) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

5.1% of Xunlei shares are held by institutional investors. Comparatively, 83.6% of Mitek Systems shares are held by institutional investors. 21.7% of Xunlei shares are held by insiders. Comparatively, 2.2% of Mitek Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Xunlei and Mitek Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xunlei	$462.41 million	0.55	$1.05 billion	($1.24)	-3.23
Mitek Systems	$179.69 million	4.40	$8.80 million	$0.47	37.28

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Xunlei and Mitek Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xunlei	0	1	0	0	2.00
Mitek Systems	0	2	1	0	2.33

Mitek Systems has a consensus price target of $19.33, indicating a potential upside of 10.35%. Given Mitek Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Mitek Systems is more favorable than Xunlei.

Risk and Volatility

Xunlei has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Mitek Systems has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Profitability

This table compares Xunlei and Mitek Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xunlei	-15.25%	0.62%	0.52%
Mitek Systems	11.39%	19.16%	11.32%

Summary

Mitek Systems beats Xunlei on 10 of the 14 factors compared between the two stocks.

About Xunlei

Xunlei Limited, together with its subsidiaries, operates an internet platform for digital media content in the People's Republic of China. Its platform is based on cloud technology that enables users to access, store, manage, and consume digital media content. The company offers Xunlei Accelerator, which enables users to accelerate digital transmission over the internet; mobile acceleration plug-in, which provides mobile device users with benefits of download speed acceleration and download success rate improvements; and subscription services that offer users premium services through Green Channel and Fast Bird products. It also provides Mobile Xunlei, a mobile application that allows users to search, download, consume, and store digital media content; Xunlei Media Player, which supports online and offline play of digital media content, as well as simultaneous play of digital media content while it is being transmitted by Xunlei Accelerator; online games through online game website and mobile app; advertising services; live streaming products, including video and audio livestreaming; and develops software and computer software, as well as other internet value-added services. In addition, the company offers cloud computing services through OneThing Cloud, and StellarCloud; and hardware for edging computing, such as OneThing Edge Cube, and OneThing Edge Atom. Further it offers ThunderChain, a blockchain infrastructure product that enables its users to develop and manage blockchain applications. The company was formerly known as Giganology Limited and changed its name to Xunlei Limited in January 2011. Xunlei Limited was founded in 2003 and is headquartered in Shenzhen, the People's Republic of China.

About Mitek Systems

Mitek Systems, Inc. provides mobile image capture and digital identity verification solutions worldwide. Its product portfolio includes Mobile Deposit that enables individuals and businesses to remotely deposit checks using their camera-equipped smartphone or tablet; Mobile Verify, an identity verification solution that is integrated into mobile apps, mobile websites, and desktop applications; and Mobile Fill, which includes automatic image capture, minimizes the numbers of clicks, and expedites form fill completion. The company also offers MiSnap, a mobile-capture software development kit that enables an intuitive user experience and instant capture of quality images of identity documents and checks. CheckReader enables financial institutions to automatically extract data from checks once they have been scanned or photographed by the application; Check Fraud Defender, an AI-powered and cloud-hosted model for fighting check fraud; and Check Intelligence that enables financial institutions to automatically extract data from a check image received across any deposit channel, including branch, ATM, remote deposit capture, and mobile. In addition, it provides MiVIP, an end-to-end KYC platform that allows companies to design, build, and deploy robust KYC journeys with little or no development resources; and MiPass provides protection against most sophisticated forms of identity theft and dangerous fraud techniques, such as deepfakes and synthetic identities. Further, the company provides ID_CLOUD, an automated identity verification solution that is integrated into a customers’ application to read and validate identity documents; IDLive Face, a passive facial liveness detection product; IDVoice, a robust AI-driven voice biometric engine; IDLive Voice to stop spoofing attacks on voice biometric systems; and IDLive Doc that works to fight fraud related to digitally displayed document images. The company was incorporated in 1986 and is based in San Diego, California.