Kornit Digital (NASDAQ: KRNT) and AlarmCom (NASDAQ:ALRM) are both small-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Earnings and Valuation

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This table compares Kornit Digital and AlarmCom’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kornit Digital $114.09 million 3.83 -$2.01 million ($0.05) -254.95
AlarmCom $338.94 million 5.30 $29.25 million $0.60 63.47

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

Profitability

This table compares Kornit Digital and AlarmCom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kornit Digital -1.77% 1.68% 1.40%
AlarmCom 8.63% -47.29% 12.95%

Analyst Recommendations

This is a summary of recent ratings for Kornit Digital and AlarmCom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kornit Digital 0 0 7 0 3.00
AlarmCom 0 1 9 0 2.90

Kornit Digital presently has a consensus target price of $19.67, suggesting a potential upside of 54.25%. AlarmCom has a consensus target price of $48.78, suggesting a potential upside of 28.09%. Given Kornit Digital’s stronger consensus rating and higher probable upside, research analysts plainly believe Kornit Digital is more favorable than AlarmCom.

Risk & Volatility

Kornit Digital has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, AlarmCom has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

92.0% of Kornit Digital shares are owned by institutional investors. Comparatively, 87.7% of AlarmCom shares are owned by institutional investors. 78.5% of AlarmCom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

AlarmCom beats Kornit Digital on 10 of the 14 factors compared between the two stocks.

About Kornit Digital

Kornit Digital Ltd. develops, designs and markets digital printing solutions for the global printed textile industry. The Company’s solutions include its digital printing systems, ink and other consumables, associated software and value added services. Its customers include custom decorators, online businesses, brand owners and contract printers. The Company categorizes its Direct to Garment (DTG) systems into two groups: entry level and high throughput. The Company’s entry-level systems consist of its Breeze and Thunder systems. Its high throughput systems consist of its Avalanche family of systems, Storm II and Paradigm II. Allegro is its Roll to Roll (R2R) printing system. Its ink and other consumables consist of NeoPigment PURE ink, binding agent, priming fluid, wiping fluid and flushing fluid. Its pigment-based inks are available in over seven colors and are formulated for use in its systems.

About AlarmCom

Alarm.com Holdings, Inc. is a platform solution for the connected property. The Company offers a suite of cloud-based solutions for the smart home and business, including interactive security, video monitoring, intelligent automation and energy management. The Company operates through two segments: Alarm.com and Other. The Alarm.com segment represents its cloud-based platform for the intelligently connected property solutions. The Other segment is focused on researching and developing home and commercial automation and energy management products and services for sale in adjacent markets. Its solutions are used in both smart homes and businesses. It is involved in designing and manufacturing various types of hardware that enable its solutions, including cellular communication modules, image sensor, video cameras and alarm.com smart thermostat. The Company offers a suite of high definition, Internet protocol (IP), video cameras to enable its video monitoring services.

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