Critical Review: Cloudflare (NYSE:NET) versus SeaChange International (NASDAQ:SEAC)

SeaChange International (NASDAQ:SEAC) and Cloudflare (NYSE:NET) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares SeaChange International and Cloudflare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SeaChange International	N/A	N/A	N/A
Cloudflare	-5.97%	-7.18%	-2.12%

Insider & Institutional Ownership

82.7% of Cloudflare shares are held by institutional investors. 3.9% of SeaChange International shares are held by company insiders. Comparatively, 12.8% of Cloudflare shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

SeaChange International has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Cloudflare has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for SeaChange International and Cloudflare, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SeaChange International	0	0	0	0	0.00
Cloudflare	3	12	13	0	2.36

Cloudflare has a consensus target price of $102.30, indicating a potential downside of 9.40%. Given Cloudflare’s stronger consensus rating and higher probable upside, analysts plainly believe Cloudflare is more favorable than SeaChange International.

Valuation and Earnings

This table compares SeaChange International and Cloudflare”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SeaChange International	$32.76 million	0.47	-$11.40 million	N/A	N/A
Cloudflare	$1.57 billion	24.65	-$183.95 million	($0.26)	-434.27

SeaChange International has higher earnings, but lower revenue than Cloudflare.

Summary

Cloudflare beats SeaChange International on 8 of the 12 factors compared between the two stocks.

About SeaChange International

SeaChange International, Inc. provides video delivery, advertising, streaming platforms, and emerging Free Ad-Supported Streaming TV (FAST) products and services that facilitate the aggregation, licensing, management and distribution of video and advertising content worldwide. It offers Operator TV Platform solutions including customer's current network with OTT video management solutions in a single deployment, digital video broadcasting – cable / quadrature amplitude modulation networks with OTT streaming, and immersive multiscreen experience and on demand services, as well as pre-integrated solutions, such as multi-content delivery networks including Broadpeak, Edgeware and HBO, multidigital rights management, and seamless integration with existing network components. The company also provides StreamVid, a cloud-based OTT video platform for operators and content owners that enables streaming services, including content ingestion, workflow automation, user management, content protection, billing and entitlement, and user applications for various device platforms, such as mobile devices or Smart TVs; Advanced advertising, a unified ad tech solution to insert adverts into various video feeds, including broadcast, internet protocol television, and OTT; and Xstream platform, a cloud-based content monetization platform that provides the range of capabilities, including generation and distribution of FAST channels, streaming enablement via content aggregation, and targeted insertion of advertisement from various demand sources. In addition, it provides professional, and maintenance and technical support services, as well as managed services. The company sells and markets its products and services through a direct sales process, as well as to systems integrators and value-added resellers. It serves cable system operators, telecommunications companies, and satellite operators, as well as broadcasters and other content providers. The company was incorporated in 1993 and is headquartered in Boston, Massachusetts.

About Cloudflare

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products. It offers website and application performance solutions, including content delivery, load balancing, DNS, agro smart routing, video stream delivery, web optimization, cache reserve, cloudfare waiting room, and cloudfare data localization suite; SASE platform through cloudfare one that provides a cloud-based network-as-a-service; network services which deliver network connectivity, security, and performance, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust services, such as cloudflare access, cloudflare gateway, remote browser isolation, cloud access security broker, cloud email security, and data loss prevention products that protects, inspects, and provides privilege rules to grant access to data and application. Further, it provides developer-based solutions consisting of cloudflare workers, R2 object storage, workers KV, durable objects, cloudfare pages, cloudfare stream, and cloudfare images; and consumer products comprising of 1.1.1.1, a DNS resolver, WARP, a virtual private network, and cloudfare registrar that secures registration and management of domain names. The company serves customers in the technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. Cloudflare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.