Reviewing Ooma (NYSE:OOMA) and Gravity (NASDAQ:GRVY)

Gravity (NASDAQ:GRVY) and Ooma (NYSE:OOMA) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Volatility and Risk

Gravity has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Ooma has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Institutional and Insider Ownership

9.9% of Gravity shares are owned by institutional investors. Comparatively, 80.4% of Ooma shares are owned by institutional investors. 9.8% of Ooma shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Gravity and Ooma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gravity	14.98%	34.76%	28.79%
Ooma	-3.83%	-2.51%	-1.32%

Analyst Recommendations

This is a breakdown of recent recommendations for Gravity and Ooma, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravity	0	0	0	0	0.00
Ooma	0	1	5	0	2.83

Ooma has a consensus price target of $16.60, suggesting a potential upside of 16.74%. Given Ooma’s stronger consensus rating and higher possible upside, analysts clearly believe Ooma is more favorable than Gravity.

Valuation & Earnings

This table compares Gravity and Ooma”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gravity	$555.74 million	0.77	$105.61 million	$8.98	6.89
Ooma	$253.43 million	1.51	-$830,000.00	($0.37)	-38.43

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

Summary

Gravity beats Ooma on 8 of the 14 factors compared between the two stocks.

About Gravity

Gravity Co., Ltd. develops and publishes online and mobile games worldwide. It offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Landverse. Its mobile games portfolio includes Ragnarok M; Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; Ragnarok Arena; WITH ISLAND; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; Generation Zombie; Ragnarok Idle Adventure; Ragnarok 20 Heroes; White Chord; WITH: Whale In The High; Ragnarok Lost Memories; and Paladog Tactics. It also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; Pigromance for Steam, Stove, Nintendo Switch, Xbox One, Xbox Series X|S; ALTF4 11 for Steam and Stove; Wetory for Steam, Stove, Nintedo Switch; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Haunted House and Pororo: The Little Penguin, and Kongsuni; and markets dolls, stationery, food, and other character based merchandises, as well as game manuals, monthly magazines, and other publications; PC games, including Puzzle Platformer, ALTF42, Ragnarok ZERO, KAMiBAKO-Mythology of Cube, Psychodemic, and FINAL KNIGHT; social network games and mobile games, such as Ragnarok V: Returns, Ragnarok: The Lost Memories and Ragnrok Begins in-house; and web-browser-based games, such as Ragnarok Prequel and Ragnarok Prequel II. Further, the company provides system development and maintenance services, as well as system integration services to third parties. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.

About Ooma

Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.