Qumu (NASDAQ:QUMU) and Secureworks (NASDAQ:SCWX) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Qumu and Secureworks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Qumu $25.01 million 1.13 -$3.62 million ($0.96) -3.02
Secureworks $518.71 million 2.95 -$39.10 million ($0.16) -117.50

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

Risk & Volatility

Qumu has a beta of -0.07, suggesting that its stock price is 107% less volatile than the S&P 500. Comparatively, Secureworks has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Qumu and Secureworks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qumu 0 1 1 0 2.50
Secureworks 3 5 0 0 1.63

Secureworks has a consensus price target of $14.25, indicating a potential downside of 24.20%. Given Secureworks’ higher probable upside, analysts clearly believe Secureworks is more favorable than Qumu.

Insider and Institutional Ownership

29.6% of Qumu shares are held by institutional investors. Comparatively, 10.8% of Secureworks shares are held by institutional investors. 15.0% of Qumu shares are held by company insiders. Comparatively, 87.5% of Secureworks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Qumu and Secureworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qumu -14.46% -58.61% -11.99%
Secureworks -7.54% -1.85% -1.27%

Summary

Secureworks beats Qumu on 9 of the 14 factors compared between the two stocks.

About Qumu

Qumu Corporation provides tools to create, manage, secure, distribute, and deliver live and on-demand video content for the enterprises. It offers an end-to-end video creation, management, and delivery solution through the sale of software licenses and hardware, software on server appliance, software-enabled devices, and a cloud-hosted software-as-a-service platform. The company also provides maintenance and support, professional, and other services. The company markets its products to customers in the banking, finance and insurance, manufacturing, services and consulting, telecom and technology, and biotech and health care markets through direct sales and channel partners in North America, Europe, and Asia. The company was formerly known as Rimage Corporation and changed its name to Qumu Corporation in September 2013. Qumu Corporation was founded in 1978 and is headquartered in Minneapolis, Minnesota.

About Secureworks

SecureWorks Corp., a cybersecurity company, provides an integrated suite of intelligence-driven information security solutions focused on protecting organizations worldwide. The company's solutions include managed security, threat intelligence, security and risk consulting, and incident response. Its solutions enable organizations to fortify their cyber defenses to prevent security breaches, detect malicious activity, respond to security breaches, and predict emerging threats. The company serves clients in a range of industries, including the financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. As of February 1, 2019, it served approximately 4,700 customers in 52 countries. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. The company was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. is a subsidiary of Dell Inc.

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