Critical Contrast: Red Violet (NASDAQ:RDVT) & Karooooo (NASDAQ:KARO)

Karooooo (NASDAQ:KARO) and Red Violet (NASDAQ:RDVT) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Profitability

This table compares Karooooo and Red Violet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Karooooo	19.29%	29.39%	19.73%
Red Violet	7.17%	6.80%	6.28%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Karooooo and Red Violet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Karooooo	0	0	2	0	3.00
Red Violet	0	0	1	0	3.00

Karooooo currently has a consensus price target of $33.00, indicating a potential downside of 20.19%. Red Violet has a consensus price target of $25.00, indicating a potential downside of 34.40%. Given Karooooo’s higher possible upside, equities research analysts clearly believe Karooooo is more favorable than Red Violet.

Earnings and Valuation

This table compares Karooooo and Red Violet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Karooooo	$4.36 billion	0.20	$39.57 million	$1.47	28.13
Red Violet	$60.20 million	8.73	$13.53 million	$0.36	105.86

Karooooo has higher revenue and earnings than Red Violet. Karooooo is trading at a lower price-to-earnings ratio than Red Violet, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

63.6% of Red Violet shares are owned by institutional investors. 74.7% of Karooooo shares are owned by insiders. Comparatively, 9.5% of Red Violet shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Karooooo has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Red Violet has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Summary

Karooooo beats Red Violet on 9 of the 13 factors compared between the two stocks.

About Karooooo

Karooooo Ltd. provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States. The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics. It provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles. In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products. It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices. Karooooo Ltd. was founded in 2001 and is headquartered in Singapore.

About Red Violet

Red Violet, Inc., a software and services company, specializes in proprietary technologies and applying analytical capabilities to deliver identity intelligence in the United States. It offers idiCORE, an investigative solution used to address various organizational challenges, which include due diligence, risk mitigation, identity authentication, fraud detection and prevention, customer acquisition, and regulatory compliance; and FOREWARN, an app-based solution that provides instant knowledge before face-to-face engagement with a consumer, as well as helps professionals to identify and mitigate risk. The company serves financial services, insurance, healthcare, retail, telecommunication companies, law enforcement and government agencies, collections, law, corporate security, and investigative firms. It markets its products and services through value-added distributors, resellers, and strategic partners; and trade shows and seminars, advertising, public relations, distribution of sales literature, and product specifications and ongoing communication with prospective customers, distributors, resellers, strategic partners, and installed base of current customers, as well as through direct sales. The company was incorporated in 2017 and is headquartered in Boca Raton, Florida.