Crossroads Systems (CRDS) & Immersion Corporation (IMMR) Critical Contrast

Crossroads Systems (NASDAQ: CRDS) and Immersion Corporation (NASDAQ:IMMR) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Crossroads Systems and Immersion Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Crossroads Systems $289,000.00 7.04 -$1.31 million ($1.07) -1.55
Immersion Corporation $52.69 million 4.03 -$22.59 million ($2.03) -3.59

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

Volatility and Risk

Crossroads Systems has a beta of 2.75, suggesting that its stock price is 175% more volatile than the S&P 500. Comparatively, Immersion Corporation has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Insider & Institutional Ownership

7.5% of Crossroads Systems shares are owned by institutional investors. Comparatively, 76.1% of Immersion Corporation shares are owned by institutional investors. 27.4% of Crossroads Systems shares are owned by insiders. Comparatively, 7.2% of Immersion Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Crossroads Systems and Immersion Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Crossroads Systems -362.98% -36.62% -20.62%
Immersion Corporation -113.47% -36.92% -21.00%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Crossroads Systems and Immersion Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crossroads Systems 0 0 0 0 N/A
Immersion Corporation 0 1 4 0 2.80

Immersion Corporation has a consensus price target of $10.75, indicating a potential upside of 47.66%. Given Immersion Corporation’s higher possible upside, analysts clearly believe Immersion Corporation is more favorable than Crossroads Systems.

Summary

Crossroads Systems beats Immersion Corporation on 7 of the 12 factors compared between the two stocks.

About Crossroads Systems

Crossroads Systems, Inc. is an intellectual property licensing company. The Company’s intellectual property assets are identified in two distinct categories: the first category is known as the 972 patent family and the second category is known as the non-972 patents. As of October 31, 2016, the 972 patent family consisted of 31 patents and pending patents that are primarily concentrated around access controls. As of October 31, 2016, the non-972 patents consisted of 140 patents and pending patents that are primarily directed to five product families: optimizing command processing, enabling interoperability, managing networks, enhancing tape libraries and improving data systems. As of October 31, 2016, approximately 50 companies have licensed 972 patents from the Company. The Company’s subsidiaries include Crossroads Systems (Texas), Inc. and Crossroads Europe GmbH.

About Immersion Corporation

Immersion Corporation is a licensing company focused on the creation, design, development and licensing of haptic technologies that allow people to use their sense of touch when operating digital devices. The Company develops, licenses and supports a range of software and intellectual property (IP). It is focused on the markets, including mobile devices, wearables, consumer, mobile entertainment and other content; console gaming; automotive; medical, and commercial. It provides advanced tactile software, related tools and technical assistance to certain customers, and offers licenses to its patented IP to other customers. Its licenses enable customers to deploy haptically-enabled devices, content and other offerings, which they sell under own brand names. It holds patents, covering digital technologies and including ways in which touch-related technology can be incorporated into and between hardware products and components, systems software, application software, and digital content.

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