Comparing Lantronix (NASDAQ:LTRX) and Radcom (NASDAQ:RDCM)

Lantronix (NASDAQ:LTRX) and Radcom (NASDAQ:RDCM) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Institutional & Insider Ownership

39.4% of Lantronix shares are held by institutional investors. Comparatively, 48.3% of Radcom shares are held by institutional investors. 2.4% of Lantronix shares are held by company insiders. Comparatively, 69.0% of Radcom 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 Lantronix and Radcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lantronix	-9.25%	-12.89%	-7.60%
Radcom	14.14%	9.96%	7.42%

Risk and Volatility

Lantronix has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, Radcom has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lantronix	$122.92 million	1.45	-$11.37 million	($0.30)	-15.10
Radcom	$61.01 million	3.51	$6.97 million	$0.58	23.57

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

Analyst Ratings

This is a breakdown of current recommendations for Lantronix and Radcom, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lantronix	1	0	3	0	2.50
Radcom	0	1	1	0	2.50

Lantronix currently has a consensus target price of $4.50, indicating a potential downside of 0.66%. Radcom has a consensus target price of $18.00, indicating a potential upside of 31.68%. Given Radcom’s higher probable upside, analysts clearly believe Radcom is more favorable than Lantronix.

Summary

Radcom beats Lantronix on 10 of the 13 factors compared between the two stocks.

About Lantronix

Lantronix, Inc. provides solutions for video surveillance, infotainment systems, and intelligent substations infrastructure in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT System Solutions, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; Embedded IoT Modules, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and Software and Engineering Services offers SaaS platform that enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login. It also offers telematics devices, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management; network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development. In addition, the company provides console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms; and hardware engineering, software engineering, and mechanical engineering, rapid prototyping and quality assurance engineering services. Lantronix, Inc. was incorporated in 1989 and is based in Irvine, California.

About Radcom

RADCOM Ltd. provides 5G ready cloud-native, network intelligence, and service assurance solutions for telecom operators or communication service providers (CSPs). It offers RADCOM ACE, including RADCOM Service Assurance, a cloud-native, 5G-ready, and virtualized service assurance solutions, which allows telecom operators to gain end-to-end network visibility and customer experience insights across all networks; RADCOM Network Visibility, a cloud-native network packet broker and filtering solution that allows CSPs to manage network traffic at scale across multiple cloud environments, and control the visibility layer to perform analysis of select datasets; and RADCOM Network Insights, a business intelligence solution that offers insights for multiple use cases enabled by data captured and correlated through RADCOM Network Visibility and RADCOM Service Assurance. The company also provides solutions for mobile and fixed networks, such as 5G, long term evolution (LTE), voice over LTE, voice over Wifi, IP multimedia subsystem, voice over IP, and universal mobile telecommunication service. It sells its products directly to customers through executives and sales representatives, as well as through a network of distributors and resellers in North America, Asia Pacific, Latin America, Europe, the Middle East, Africa, and Israel. The company was formerly known as Big Blue Catalogue Ltd. and changed its name to RADCOM Ltd. in 1989. RADCOM Ltd. was incorporated in 1985 and is headquartered in Tel Aviv, Israel.