Head to Head Analysis: Neonode (NASDAQ:NEON) & Smith Micro Software (NASDAQ:SMSI)

Neonode (NASDAQ:NEON) and Smith Micro Software (NASDAQ:SMSI) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Valuation & Earnings

This table compares Neonode and Smith Micro Software”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neonode	$2.06 million	6.68	$8.49 million	($0.32)	-2.56
Smith Micro Software	$17.36 million	0.83	-$29.33 million	($6.90)	-0.41

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

Volatility and Risk

Neonode has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Neonode and Smith Micro Software, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neonode	1	1	0	0	1.50
Smith Micro Software	1	0	1	0	2.00

Neonode presently has a consensus target price of $6.00, suggesting a potential upside of 631.71%. Smith Micro Software has a consensus target price of $12.50, suggesting a potential upside of 344.84%. Given Neonode’s higher probable upside, analysts plainly believe Neonode is more favorable than Smith Micro Software.

Profitability

This table compares Neonode and Smith Micro Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neonode	386.64%	-34.66%	-30.25%
Smith Micro Software	-165.35%	-55.78%	-41.02%

Institutional and Insider Ownership

11.6% of Neonode shares are owned by institutional investors. Comparatively, 20.8% of Smith Micro Software shares are owned by institutional investors. 21.9% of Neonode shares are owned by company insiders. Comparatively, 34.7% of Smith Micro Software shares are owned 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.

Summary

Neonode beats Smith Micro Software on 8 of the 14 factors compared between the two stocks.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.

About Smith Micro Software

Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.