Critical Analysis: FalconStor Software (OTCMKTS:FALC) versus Karooooo (NASDAQ:KARO)

FalconStor Software (OTCMKTS:FALC) and Karooooo (NASDAQ:KARO) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Valuation & Earnings

This table compares FalconStor Software and Karooooo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FalconStor Software	$11.60 million	0.89	$980,000.00	($0.04)	-36.31
Karooooo	$225.29 million	N/A	$39.57 million	$1.47	27.97

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

Analyst Ratings

This is a summary of current ratings for FalconStor Software and Karooooo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FalconStor Software	0	0	0	0	0.00
Karooooo	0	0	2	0	3.00

Karooooo has a consensus price target of $33.00, indicating a potential downside of 19.73%. Given Karooooo’s stronger consensus rating and higher probable upside, analysts plainly believe Karooooo is more favorable than FalconStor Software.

Institutional & Insider Ownership

9.5% of FalconStor Software shares are owned by institutional investors. 52.8% of FalconStor Software shares are owned by insiders. Comparatively, 74.7% of Karooooo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares FalconStor Software and Karooooo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FalconStor Software	13.98%	-8.94%	14.06%
Karooooo	19.29%	29.39%	19.73%

Risk and Volatility

FalconStor Software has a beta of 2.16, meaning that its stock price is 116% more volatile than the S&P 500. Comparatively, Karooooo has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Summary

Karooooo beats FalconStor Software on 11 of the 13 factors compared between the two stocks.

About FalconStor Software

FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. It offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome physical tape libraries for archive related data preservation without being replacing their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. The company also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. It sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. The company was incorporated in 1994 and is headquartered in Austin, Texas.

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.