Critical Analysis: ImageWare Systems (OTCMKTS:IWSY) and Zuora (OTCMKTS:ZUO)

ImageWare Systems (OTCMKTS:IWSY) and Zuora (NYSE:ZUO) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares ImageWare Systems and Zuora’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ImageWare Systems $3.51 million 13.42 -$11.58 million N/A N/A
Zuora $276.06 million 5.26 -$83.39 million ($0.74) -16.95

ImageWare Systems has higher earnings, but lower revenue than Zuora.

Insider and Institutional Ownership

0.4% of ImageWare Systems shares are held by institutional investors. Comparatively, 49.3% of Zuora shares are held by institutional investors. 32.6% of ImageWare Systems shares are held by company insiders. Comparatively, 17.1% of Zuora shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares ImageWare Systems and Zuora’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ImageWare Systems -328.94% N/A -101.51%
Zuora -28.09% -48.78% -22.58%

Analyst Recommendations

This is a summary of recent recommendations for ImageWare Systems and Zuora, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ImageWare Systems 0 0 0 0 N/A
Zuora 1 3 2 0 2.17

Zuora has a consensus target price of $15.21, suggesting a potential upside of 21.33%. Given Zuora’s higher probable upside, analysts plainly believe Zuora is more favorable than ImageWare Systems.

Risk and Volatility

ImageWare Systems has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, Zuora has a beta of 2.19, indicating that its stock price is 119% more volatile than the S&P 500.

Summary

Zuora beats ImageWare Systems on 7 of the 12 factors compared between the two stocks.

ImageWare Systems Company Profile

ImageWare Systems, Inc. provides biometrically enabled software-based identity management solutions for biometrics, secure credential, law enforcement, and public safety markets worldwide. Its flagship product is the patented IWS Biometric Engine, a multi-biometric software platform that enables the enrollment and management of unlimited population sizes. The company also offers GoMobile Interactive that enables business, service, and content providers to offer users biometric security for their products, services, and content; IWS PIV (personal identity verification) Management Application that supplies Web-based graphical user interface to server functions; IWS PIV Middleware, which connects card reader and PIV card; IWS Background Server, a software application for biometric identity management functions; IWS Desktop Security, an authentication management platform; and IWS Biometric Quality Assessment and Enhancement, a biometric image enhancement and assessment solution. Its secure credential products include GoVerifyID, a biometric authentication solution; IWS Card Management System to support and manage the issuance of smart cards; IWS EPI Suite, an ID software solution for producing, issuing, and managing credentials and personal identification cards; IWS EPI Builder, which offers various aspects of ID functionality; IWS EPI PrintFarm software for card printing; and IWS PIV Encoder to program the PIV smart cards. In addition, the company provides IWS Law Enforcement, a digital booking, identification, and investigative solution; and LiveScan, Capture, Facial Recognition, Law Enforcement Web, Witness View, and IWS Biometric Engine add-on modules, as well as maintenance and customer support, and software customization and fulfillment services. It serves healthcare, banking, retail/e-commerce, government, and law enforcement and public safety markets. ImageWare Systems, Inc. was founded in 1987 and is headquartered in San Diego, California.

Zuora Company Profile

Zuora, Inc. provides cloud-based software on a subscription basis that enables companies in various industries to launch, manage, and transform into a subscription business. The company offers Zuora Central platform that acts as an intelligent subscription management hub that automates the subscription order-to-cash process, including quoting, billing, collections, analytics, and revenue recognition. Its products include Zuora Billing, Zuora RevPro, Zuora CPQ, Zuora Insights, and Zuora Collect. Zuora, Inc. sells its products through its direct sales force and with GSI partners to various industries comprising software, hardware, media, transportation, construction, healthcare, education, retail, Internet of Things, and others worldwide. The company was incorporated in 2006 and is headquartered in San Mateo, California.

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