Head to Head Comparison: Franklin Wireless (NASDAQ:FKWL) vs. DZS (NASDAQ:DZSI)

Franklin Wireless (NASDAQ:FKWL) and DZS (NASDAQ:DZSI) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Risk and Volatility

Franklin Wireless has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500. Comparatively, DZS has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Institutional and Insider Ownership

9.9% of Franklin Wireless shares are owned by institutional investors. Comparatively, 37.5% of DZS shares are owned by institutional investors. 29.6% of Franklin Wireless shares are owned by insiders. Comparatively, 1.5% of DZS shares are owned 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 Franklin Wireless and DZS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Wireless	-6.23%	-6.94%	-5.33%
DZS	-13.23%	-14.49%	-5.21%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Franklin Wireless and DZS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Wireless	0	0	0	0	N/A
DZS	0	1	5	0	2.83

DZS has a consensus price target of $16.86, indicating a potential upside of 1,253.99%. Given DZS’s higher possible upside, analysts clearly believe DZS is more favorable than Franklin Wireless.

Valuation and Earnings

This table compares Franklin Wireless and DZS’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Wireless	$45.95 million	0.82	-$2.86 million	($0.24)	-13.37
DZS	$375.69 million	0.10	-$37.43 million	($1.76)	-0.71

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

Summary

DZS beats Franklin Wireless on 7 of the 13 factors compared between the two stocks.

About Franklin Wireless

Franklin Wireless Corp. provides integrated wireless solutions. The company's products include 5G/4G wireless broadband products, such as wi-fi mobile hotspot, fixed wireless routers, and enterprise gateway CPE; and IoT tracking and connected devices, including smart IoT tracking device, connected car, and home phone connect. It also offers IOT server platform and application, which comprises Pintrac, a cloud based telecom grade server platform; Pintrac Mobile Device Management, an LTE hotspot; Pintrac Pet, a pet tracking application; Pintrac Auto that tracks, locates, and manages vehicles for consumers and businesses; and JEXtream, a cloud based telecom grade server platform for 5G devices and routers that enables enhanced remote management of device functionality. The company directly markets and sells its products to wireless operators, as well as indirectly through strategic partners and distributors located primarily in the North America, the Caribbean and South America, and Asia. Franklin Wireless Corp. was founded in 1981 and is headquartered in San Diego, California.

About DZS

DZS Inc. provides access and optical networking infrastructure and cloud software solutions in the Americas, Europe, the Middle East, Africa, and Asia. The company offers access edge solutions through DZS Velocity, including voice, high-definition and ultra-high-definition video, highspeed internet access, and business class services; switching and routing products; and XCelerate for increasing the velocity with which service providers can leap to multi-gigabit services. It also provides subscriber edge solutions through DZS Helix comprising optical network terminals (ONTs) and smart gateway solutions for fiber to the x (FTTx) deployment; and connected premises products, consisting of indoor/outdoor ONTs and gateways. In addition, the company offers optical edge solutions through DZS Chronos and DZS Saber, which provides solutions for mobile operators and service providers that enables them to upgrade their mobile fronthaul/midhaul/backhaul systems and migrate to fifth generation wireless technologies. Further, it provides cloud software solutions through DZS Cloud that offers a commercial, carrier-grade network-slicing enabled orchestration platform, which supports open RAN and 4G/5G networks. The company was formerly known as DASAN Zhone Solutions, Inc. and changed its name to DZS Inc. in August 2020. DZS Inc. was founded in 1996 and is headquartered in Plano, Texas.