Analyzing Formula Systems (1985) (NASDAQ:FORTY) and Duos Technologies Group (NASDAQ:DUOT)

Duos Technologies Group (NASDAQ:DUOT) and Formula Systems (1985) (NASDAQ:FORTY) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Risk & Volatility

Duos Technologies Group has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Formula Systems (1985) has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Valuation and Earnings

This table compares Duos Technologies Group and Formula Systems (1985)”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duos Technologies Group	$27.02 million	8.79	-$9.84 million	$0.99	8.18
Formula Systems (1985)	$2.63 billion	0.75	$606.48 million	$39.83	3.24

Formula Systems (1985) has higher revenue and earnings than Duos Technologies Group. Formula Systems (1985) is trading at a lower price-to-earnings ratio than Duos Technologies Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Duos Technologies Group and Formula Systems (1985), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duos Technologies Group	0	2	2	0	2.50
Formula Systems (1985)	0	1	0	0	2.00

Duos Technologies Group presently has a consensus target price of $24.50, suggesting a potential upside of 202.47%. Given Duos Technologies Group’s stronger consensus rating and higher possible upside, analysts clearly believe Duos Technologies Group is more favorable than Formula Systems (1985).

Insider & Institutional Ownership

42.6% of Duos Technologies Group shares are owned by institutional investors. Comparatively, 34.8% of Formula Systems (1985) shares are owned by institutional investors. 3.5% of Duos Technologies Group shares are owned by insiders. Comparatively, 23.3% of Formula Systems (1985) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Duos Technologies Group and Formula Systems (1985)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Duos Technologies Group	158.99%	-11.88%	-9.85%
Formula Systems (1985)	21.57%	4.38%	2.13%

Summary

Duos Technologies Group beats Formula Systems (1985) on 8 of the 14 factors compared between the two stocks.

About Duos Technologies Group

Duos Technologies Group, Inc. designs, develops, deploys, and operates intelligent technology solutions in North America. The company provides solutions, such as Centraco, an enterprise information management software platform that consolidates data and events from multiple sources into a unified and distributive user interface; and truevue360, an integrated platform to develop and deploy artificial intelligence algorithms, including machine learning, computer vision, object detection, and deep neural network-based processing for real-time applications. Its proprietary applications include Railcar Inspection Portal that provides freight and transit railroad customers and select government agencies the ability to conduct fully automated railcar inspections of trains while they are moving at full speed. It also develops Automated Logistics Information System, which automates gatehouse operations, as well as develops solutions for rail, trucking, aviation, and other vehicle-based processes. In addition, the company provides consulting services, including consulting and auditing; software licensing with optional hardware sales; customer service training; and maintenance support. The company operates its services under the duostech brand. The company is headquartered in Jacksonville, Florida.

About Formula Systems (1985)

Formula Systems (1985) Ltd., through its subsidiaries, provides proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, computer infrastructure and integration solutions, and learning and integration worldwide. The company offers computer and telecommunication infrastructure solutions; and sells and markets computers and peripheral equipment, and cloud based solutions and services relating to databases and big data. It also provides customer relations management, computer systems management infrastructures, web world content management, database and data warehouse mining, application integration, database and systems, data management, and software development tools; and application and professional training courses, and advanced professional studies. In addition, the company offers property and casualty insurance platforms, such as Sapiens, Sapiens CoreSuite, Sapiens IDITSuite, and IDIT Go; life, pension, and annuities platforms, including Sapiens, Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster; Sapiens Cloud-based DigitalSuite; data and analytics platform; and reinsurance software solutions comprising Sapiens ReinsuranceMaster, Sapiens ReinsurancePro, and Sapiens Reinsurance GO. Further, it provides Sapiens workers' compensation solutions; Sapiens medical professional liability solutions; financial and compliance solutions, such as Sapiens FinancialPro, Sapiens Financial GO, Sapiens StatementPro, Sapiens CheckPro, and Sapiens Reporting Tools; Sapiens Decision; and technology-based solutions. Additionally, it offers application development and business process integration platforms; vertical software solutions; strategic consulting and outsourcing services; and professional services in various areas, as well as develops on-premise payroll software. The company was incorporated in 1985 and is headquartered in Or Yehuda, Israel.