Head to Head Contrast: Datawatch (DWCH) versus QAD (NASDAQ:QADB)

Datawatch (NASDAQ: DWCH) and QAD (NASDAQ:QADB) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Risk & Volatility

Datawatch has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, QAD has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Dividends

QAD pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Datawatch does not pay a dividend. QAD pays out -23.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Datawatch and QAD’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Datawatch $36.26 million 3.51 -$3.99 million ($0.22) -46.82
QAD $277.97 million 2.39 -$15.45 million ($1.03) -33.51

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Datawatch and QAD, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Datawatch 0 1 2 0 2.67
QAD 0 0 0 0 N/A

Datawatch currently has a consensus price target of $14.00, suggesting a potential upside of 35.92%. Given Datawatch’s higher probable upside, equities research analysts clearly believe Datawatch is more favorable than QAD.

Insider & Institutional Ownership

39.8% of Datawatch shares are held by institutional investors. Comparatively, 1.9% of QAD shares are held by institutional investors. 9.4% of Datawatch shares are held by company insiders. Comparatively, 67.4% of QAD shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Datawatch and QAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Datawatch -6.89% -3.81% -2.56%
QAD -6.40% -2.06% -0.86%

Datawatch Company Profile

Datawatch Corporation is engaged in the design, development, marketing, distribution and support of business computer software primarily for the self-service data preparation and visual data discovery markets. The Company also provides services, including implementation and support of its software products, as well as training on their use and administration. The Company’s product family includes Datawatch Monarch, Datawatch Panopticon and Datawatch Report Mining Server (RMS). The Company offers its enterprise products through perpetual licenses and subscription pricing models. The Company also offers educational services for customers and partners implementing and learning about the platform, maintenance and support, and professional services to provide in-depth technical assistance for software implementations. The Company offers an array of live and virtual classroom instruction, including private onsite classes.

QAD Company Profile

QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.

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