NetScout Systems (NASDAQ:NTCT – Get Free Report) and FalconStor Software (OTCMKTS:FALC – Get Free Report) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
Risk and Volatility
NetScout Systems has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, FalconStor Software has a beta of 3.2, suggesting that its stock price is 220% more volatile than the S&P 500.
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Valuation and Earnings
This table compares NetScout Systems and FalconStor Software”s gross revenue, earnings per share (EPS) and valuation.
FalconStor Software has lower revenue, but higher earnings than NetScout Systems. FalconStor Software is trading at a lower price-to-earnings ratio than NetScout Systems, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
91.6% of NetScout Systems shares are held by institutional investors. Comparatively, 9.5% of FalconStor Software shares are held by institutional investors. 3.8% of NetScout Systems shares are held by insiders. Comparatively, 52.8% of FalconStor Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for NetScout Systems and FalconStor Software, as provided by MarketBeat.com.
NetScout Systems presently has a consensus price target of $29.00, suggesting a potential upside of 14.40%. Given NetScout Systems’ stronger consensus rating and higher probable upside, research analysts clearly believe NetScout Systems is more favorable than FalconStor Software.
Profitability
This table compares NetScout Systems and FalconStor Software’s net margins, return on equity and return on assets.
Summary
NetScout Systems beats FalconStor Software on 11 of the 14 factors compared between the two stocks.
About NetScout Systems
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NetScout Systems, Inc. provides service assurance and cybersecurity solutions for protect digital business services against disruptions in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides nGeniusPULSE, an active testing tool that enables enterprises to identify infrastructure performance issues and determine application availability, reliability, and performance; and nGenius Business Analytics solution, which enables service providers to analyze their network traffic. In addition, the company offers ISNG, an advanced passive network probe; packet flow systems that deliver targeted network traffic access to various monitoring and security tools and systems; and a suite of test access points that enable non-disruptive access to network traffic. Further, it provides cybersecurity solutions to protect their networks against distributed denial of service attacks under the Arbor brand, such as Arbor Sightline, Arbor Threat Mitigation System, Arbor Insight, Arbor Edge Defense, and Arbor Cloud. Additionally, the company offers advanced threat detection solutions, such as Omnis Cyber Investigator. It serves enterprise customers in various industries, including financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, Internet service providers, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. The company was incorporated in 1984 and is headquartered in Westford, Massachusetts.
About FalconStor Software
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FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. It offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome physical tape libraries for archive related data preservation without being replacing their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. The company also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. It sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. The company was incorporated in 1994 and is headquartered in Austin, Texas.