Financial Review: KVH Industries (KVHI) & Sierra Wireless (SWIR)

KVH Industries (NASDAQ: KVHI) and Sierra Wireless (NASDAQ:SWIR) 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 analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Risk and Volatility

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KVH Industries has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 2.76, meaning that its share price is 176% more volatile than the S&P 500.



Analyst Recommendations

This is a summary of current ratings for KVH Industries and Sierra Wireless, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KVH Industries 0 0 1 0 3.00
Sierra Wireless 0 8 3 0 2.27

KVH Industries presently has a consensus target price of $10.00, suggesting a potential downside of 8.26%. Sierra Wireless has a consensus target price of $24.30, suggesting a potential upside of 43.36%. Given Sierra Wireless’ higher possible upside, analysts plainly believe Sierra Wireless is more favorable than KVH Industries.

Profitability

This table compares KVH Industries and Sierra Wireless’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KVH Industries -6.89% -1.25% -0.67%
Sierra Wireless 0.60% 4.82% 3.19%

Valuation and Earnings

This table compares KVH Industries and Sierra Wireless’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KVH Industries $160.09 million 1.19 -$11.03 million ($0.13) -83.85
Sierra Wireless $692.08 million 0.88 $4.13 million $0.58 29.22

Sierra Wireless has higher revenue and earnings than KVH Industries. KVH Industries is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

54.9% of KVH Industries shares are owned by institutional investors. Comparatively, 25.7% of Sierra Wireless shares are owned by institutional investors. 9.7% of KVH Industries shares are owned by insiders. Comparatively, 2.0% of Sierra Wireless shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Sierra Wireless beats KVH Industries on 10 of the 14 factors compared between the two stocks.

KVH Industries Company Profile

KVH Industries, Inc. designs, develops, manufactures, and markets mobile connectivity products and services for the marine and land mobile markets in the United States and internationally. The company offers mobile satellite TV and communications products, including satellite TV antennas; two-way satellite communications systems; onboard V-IP terminals and hub equipment; network management hardware and software products for maritime communications; and Iridium OpenPort hardware products and services. It also offers airtime plans that enable customers to obtain Internet and voice services; and value-added, and news and radio content services. In addition, the company provides navigation, guidance, and stabilization products for the commercial and defense markets comprising precision fiber optic gyro-based systems that enable platform and optical stabilization, navigation, pointing, and guidance; tactical navigation systems for tactical trucks and light armored vehicles; and commercial products, such as navigation and positioning systems for various applications consisting of precision mapping, dynamic surveying, autonomous vehicles, train location control and track geometry measurement systems, industrial robotics, and optical stabilization applications. Further, it offers content, maritime news, sporting content, and television programming delivery services; movie distribution services; maritime e-learning content and related services; and services and support for the mini-VSAT Broadband solution. The company sells its mobile communications products through a network of independent retailers, chain stores, and distributors; and navigation products directly to the United States and foreign governments, and government contractors, as well as through authorized independent sales representatives. The company also sells and leases its products directly to end users. KVH Industries, Inc. was founded in 1978 and is headquartered in Middletown, Rhode Island.

Sierra Wireless Company Profile

Sierra Wireless, Inc., together with its subsidiaries, engages in building the Internet of Things (IoT) with intelligent wireless solutions in North America, Europe, and the Asia Pacific. It operates in three segments: Original Equipment Manufacturer (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment offers embedded cellular modules, short range wireless modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; and Legato, an open source, Linux-based application framework. This segment provides its products and solutions to a range of industries, including automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, and other industries. It also offers professional services to OEM customers during their product development and launch process. The Enterprise Solutions segment provides a range of second, third, and fourth generation LTE intelligent cellular routers and gateways, as well as security and device management solutions, and professional services to public safety, transportation field service, energy, industrial, retail, and financial enterprises. The Cloud and Connectivity Services segment provides secure and scalable cloud based platform for deploying and managing IoT subscriptions, devices, data, and applications; connectivity services, which include smart SIM and core network platforms; and managed broadband cellular services. Sierra Wireless, Inc. sells its products directly, as well as through various indirect channels, such as OEMs, distributors, value added resellers, and hardware vendors, as well as SIM vendors and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.

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