Contrasting Shotspotter (NASDAQ:SSTI) and ChannelAdvisor (NASDAQ:ECOM)

Shotspotter (NASDAQ:SSTI) and ChannelAdvisor (NYSE:ECOM) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Earnings and Valuation

This table compares Shotspotter and ChannelAdvisor’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shotspotter $34.75 million 13.81 -$2.72 million ($0.26) -163.04
ChannelAdvisor $131.22 million 1.92 -$7.60 million ($0.26) -34.77

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Shotspotter and ChannelAdvisor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shotspotter 0 2 7 0 2.78
ChannelAdvisor 0 0 3 0 3.00

Shotspotter currently has a consensus target price of $53.30, indicating a potential upside of 25.73%. ChannelAdvisor has a consensus target price of $17.67, indicating a potential upside of 95.50%. Given ChannelAdvisor’s stronger consensus rating and higher probable upside, analysts plainly believe ChannelAdvisor is more favorable than Shotspotter.

Insider & Institutional Ownership

62.7% of Shotspotter shares are held by institutional investors. Comparatively, 81.8% of ChannelAdvisor shares are held by institutional investors. 36.1% of Shotspotter shares are held by company insiders. Comparatively, 8.1% of ChannelAdvisor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Shotspotter has a beta of 2.98, suggesting that its share price is 198% more volatile than the S&P 500. Comparatively, ChannelAdvisor has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.

Profitability

This table compares Shotspotter and ChannelAdvisor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shotspotter -4.99% -9.63% -3.95%
ChannelAdvisor -5.16% -7.02% -4.45%

Summary

Shotspotter beats ChannelAdvisor on 7 of the 13 factors compared between the two stocks.

About Shotspotter

ShotSpotter, Inc. provides precision-policing and security solutions for law enforcement and security personnel in the United States and South Africa. Its solutions include ShotSpotter Flex, a public safety solution, which serves cities and municipalities to identify, locate, and deter gun violence by incorporating a real-time gunshot detection system into their policing systems; and ShotSpotter Missions, a cloud-based patrol management solution to help police departments plan patrol missions and tactics for crime deterrence. The company also provides ShotSpotter SecureCampus that helps the law enforcement and security personnel serving universities, colleges, and other educational institutions to mitigate risk and enhance security by notifying authorities and first responders of an active-shooter. In addition, it offers ShotSpotter SiteSecure, which serves customers, such as corporations to safeguard their facilities; and public agencies focused on protecting critical infrastructure, including train stations, airports, and freeways. The company sells its solutions through its direct sales teams. ShotSpotter, Inc. was founded in 1996 and is headquartered in Newark, California.

About ChannelAdvisor

ChannelAdvisor Corporation provides software-as-a-service solutions in the United States and internationally. Its e-commerce cloud platform helps brands and retailers to improve their online performance by expanding sales channels, connecting with consumers around the world, optimizing their operations for peak performance, and providing actionable analytics to improve competitiveness. Its suite of solutions include various modules, including Marketplaces module that connects customers to third-party marketplaces; and Digital Marketing module, which connects customers to compare shopping Websites that allow customers to advertise products on search engines. The company also offers Where to Buy solution that allows brands to provide their Web visitors or digital marketing audiences with information about the authorized resellers that carry their products and the availability of those products; and Product Intelligence, a solution that provides brands with insights about online assortment, product coverage gaps, pricing trends, and adherence by their retailers to content guidelines. Its customers include online businesses of online businesses of brands and retailers, as well as advertising agencies that use its solutions on behalf of their clients. The company was founded in 2001 and is headquartered in Morrisville, North Carolina.

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