Financial Survey: Climb Global Solutions (NASDAQ:CLMB) and Richardson Electronics (NASDAQ:RELL)

Richardson Electronics (NASDAQ:RELL) and Climb Global Solutions (NASDAQ:CLMB) are both small-cap technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Risk and Volatility

Richardson Electronics has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Climb Global Solutions has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Insider and Institutional Ownership

72.0% of Richardson Electronics shares are owned by institutional investors. Comparatively, 49.7% of Climb Global Solutions shares are owned by institutional investors. 31.7% of Richardson Electronics shares are owned by company insiders. Comparatively, 3.8% of Climb Global Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Richardson Electronics and Climb Global Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Richardson Electronics	0	1	1	1	3.00
Climb Global Solutions	0	2	2	1	2.80

Richardson Electronics currently has a consensus target price of $24.00, suggesting a potential upside of 36.99%. Climb Global Solutions has a consensus target price of $31.00, suggesting a potential downside of 2.05%. Given Richardson Electronics’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Richardson Electronics is more favorable than Climb Global Solutions.

Earnings and Valuation

This table compares Richardson Electronics and Climb Global Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Richardson Electronics	$228.56 million	1.13	$6.38 million	$0.44	39.82
Climb Global Solutions	$652.52 million	0.91	$21.33 million	$1.12	28.26

Climb Global Solutions has higher revenue and earnings than Richardson Electronics. Climb Global Solutions is trading at a lower price-to-earnings ratio than Richardson Electronics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Richardson Electronics and Climb Global Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Richardson Electronics	2.79%	3.55%	2.83%
Climb Global Solutions	2.88%	18.87%	5.04%

About Richardson Electronics

Richardson Electronics, Ltd. engages in the provision of engineered solutions, power grid and microwave tube, and related consumables worldwide. The Power and Microwave Technologies segment manufactures electron tubes and radio frequency (RF), microwave and power components used in semiconductor manufacturing equipment, RF, and wireless and industrial power applications, as well as various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology. This segment also provides thyratrons and rectifiers, power tubes, ignitrons, magnetrons, phototubes, microwave generators, ultracapacitor modules, and liquid crystal display monitors under the Amperex, Cetron, and National brands. The Green Energy Solutions segment offers design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket, and technical service and repair services for various applications, such as wind, solar, hydrogen, and electric vehicles; and other power management applications that support green solutions including synthetic diamond manufacturing. The Canvys segment provides custom display solutions, which includes touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages, and certification services. The Healthcare segment provides diagnostic imaging replacement parts for CT and MRI systems, replacement CT and MRI tubes, CT service training, MRI and RF amplifiers, hydrogen thyratrons, klystrons, magnetrons, flat panel detector upgrades, pre-owned CT systems, and additional replacement solutions. It serves energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The company was founded in 1947 and is headquartered in LaFox, Illinois.

About Climb Global Solutions

Climb Global Solutions Inc. operates as a value-added information technology (IT) distribution and solutions company in the United States, Canada, Europe, the United Kingdom, and internationally. It operates in two segments, Distribution and Solutions. The company distributes technical software to corporate and value-added resellers, consultants, and systems integrators under the name Climb Channel Solutions; and provides cloud solutions and resells software, hardware, and services under the name Grey Matter. It also resells computer software and hardware developed by others, as well as provides technical services to end user customers. In addition, the company offers a line of products from various software vendors; and tools for virtualization/cloud computing, security, networking, storage and infrastructure management, application lifecycle management, and other technically sophisticated domains, as well as computer hardware. It markets its products through its own web sites, local and on-line seminars, events, webinars, and social media, as well as direct email and printed materials. The company was formerly known as Wayside Technology Group, Inc. and changed its name to Climb Global Solutions Inc. in October 2022. Climb Global Solutions Inc. was incorporated in 1982 and is headquartered in Eatontown, New Jersey.