Critical Comparison: CommScope (NASDAQ:COMM) and Sonic Foundry (NASDAQ:SOFO)

Sonic Foundry (NASDAQ:SOFO) and CommScope (NASDAQ:COMM) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Volatility and Risk

Sonic Foundry has a beta of -0.47, indicating that its share price is 147% less volatile than the S&P 500. Comparatively, CommScope has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sonic Foundry and CommScope’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonic Foundry	$23.04 million	0.00	-$19.35 million	($1.62)	0.00
CommScope	$5.09 billion	0.18	-$1.45 billion	($8.85)	-0.49

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

Insider & Institutional Ownership

88.0% of CommScope shares are owned by institutional investors. 46.5% of Sonic Foundry shares are owned by insiders. Comparatively, 2.6% of CommScope shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Sonic Foundry and CommScope’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonic Foundry	N/A	N/A	N/A
CommScope	-30.88%	-1.75%	0.46%

Analyst Ratings

This is a summary of current ratings and recommmendations for Sonic Foundry and CommScope, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonic Foundry	0	1	0	0	2.00
CommScope	2	4	0	0	1.67

CommScope has a consensus price target of $1.75, indicating a potential downside of 59.58%. Given CommScope’s higher possible upside, analysts clearly believe CommScope is more favorable than Sonic Foundry.

Summary

Sonic Foundry beats CommScope on 7 of the 13 factors compared between the two stocks.

About Sonic Foundry

Sonic Foundry, Inc. provides video capture, management, and streaming solutions in the United States, Europe, the Middle East, Asia, and internationally. The company offers Video Capture solutions, including Mediasite Recorder and Recorder Pro that are built-in room appliances used in schedule-based capture and advanced audio/video integration; Mediasite Mobile Recorders, a portable recording device used to capture and stream broadcast-quality video; Mediasite Mosaic & Mosaic Pro that allows instructors, employees, and students to create videos, screencasts, and slideshows from their computers or mobile devices; and Mediasite Capture, a browser-based recording application that provides users a quick way to record their camera, microphone, and desktop. It also provides Video Management and Delivery solutions to manage, search, analyze, publish, and stream video content; Vidable, an AI powered solution that turns an organization's video libraries into dynamic knowledge base; Global Learning Exchange that provides students to access higher education in a flexible, cost effective, and locally supported environment; and Mediasite Cloud, a Software as a Service solution to host and manage customers' content. It markets its products to educational institutions, corporations, and government entities through reseller networks, direct sales, and partnerships with system integrators. Sonic Foundry, Inc. was founded in 1991 and is headquartered in Madison, Wisconsin.

About CommScope

CommScope Holding Company, Inc. provides infrastructure solutions for communications, data center, and entertainment networks worldwide. The company operates through Connectivity and Cable Solutions (CCS); Outdoor Wireless Networks (OWN); Networking, Intelligent Cellular and Security Solutions (NICS), and Access Network Solutions (ANS) segments. The CCS segment provides network solutions for indoor and outdoor network applications; and fiber optic and copper connectivity and cable solutions for use in telecommunications, cable television, residential broadband networks, data centers and business enterprises. The OWN segment provides base station antennas, radio frequency filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel towers, accessories, wireless Spectrum management business and Comsearch products. The NICS segment offers indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches; an Internet of Things suite, on-premises and cloud-based control and management systems; and software and software-as-a-service applications. The ANS segment offers cable modem termination systems, video infrastructure, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art residential and metro distribution network. It offers its products and services through independent distributors, specialized resellers and distributors, wireless and wireline operators, original equipment manufacturers, and system integrators, as well as directly to customers. The company was formerly known as Cedar I Holding Company, Inc. and changed its name to CommScope Holding Company, Inc. in January 2011. CommScope Holding Company, Inc. was founded in 1976 and is based in Claremont, North Carolina.