Head to Head Analysis: Sangoma Technologies (NASDAQ:SANG) versus System1 (NYSE:SST)

System1 (NYSE:SST) and Sangoma Technologies (NASDAQ:SANG) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Valuation and Earnings

This table compares System1 and Sangoma Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
System1	$401.97 million	0.20	-$227.22 million	($1.21)	-0.72
Sangoma Technologies	$247.28 million	0.89	-$8.66 million	($0.25)	-26.36

Sangoma Technologies has lower revenue, but higher earnings than System1. Sangoma Technologies is trading at a lower price-to-earnings ratio than System1, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

87.5% of System1 shares are held by institutional investors. Comparatively, 39.7% of Sangoma Technologies shares are held by institutional investors. 14.1% of System1 shares are held by insiders. Comparatively, 14.0% of Sangoma Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares System1 and Sangoma Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
System1	-24.18%	-68.85%	-18.27%
Sangoma Technologies	-3.32%	-3.12%	-2.00%

Risk and Volatility

System1 has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Sangoma Technologies has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for System1 and Sangoma Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
System1	0	1	0	0	2.00
Sangoma Technologies	0	0	0	0	0.00

System1 currently has a consensus target price of $2.00, suggesting a potential upside of 130.23%. Given System1’s stronger consensus rating and higher possible upside, research analysts clearly believe System1 is more favorable than Sangoma Technologies.

Summary

Sangoma Technologies beats System1 on 7 of the 13 factors compared between the two stocks.

About System1

System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.

About Sangoma Technologies

Sangoma Technologies Corporation develops, manufactures, distributes, and supports voice and data connectivity components for software-based communication applications worldwide. The company offers Switchvox, a voice over internet protocol phone system; Switchvox Cloud, a unified communications solution, as well as provides cloud communication solutions. It offers SIP Trunking, a telephone service for one or multiple locations; PBXact Cloud, a centralized internet based solution; Asterisk and FreePBX, an open source IP PBX software; and FAXStation, a fax-over-IP solution. In addition, the company provides desk phone, DECT phones, and headset related products. Further, it offers VoIP gateways, session border controllers, telephony card, and managed service provider services. Sangoma Technologies Corporation was founded in 1984 and is headquartered in Markham, Canada.