Reviewing FalconStor Software (OTCMKTS:FALC) and BlackBerry (NYSE:BB)

BlackBerry (NYSE:BB) and FalconStor Software (OTCMKTS:FALC) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current recommendations for BlackBerry and FalconStor Software, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackBerry	0	6	0	0	2.00
FalconStor Software	0	0	0	0	N/A

BlackBerry currently has a consensus target price of $4.08, indicating a potential upside of 48.48%. Given BlackBerry’s higher probable upside, research analysts plainly believe BlackBerry is more favorable than FalconStor Software.

Valuation & Earnings

This table compares BlackBerry and FalconStor Software’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackBerry	$853.00 million	1.90	-$130.00 million	($0.24)	-11.46
FalconStor Software	$11.60 million	1.01	$980,000.00	($0.09)	-18.22

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

Volatility & Risk

BlackBerry has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, FalconStor Software has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500.

Profitability

This table compares BlackBerry and FalconStor Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackBerry	-15.24%	-0.24%	-0.13%
FalconStor Software	8.43%	-5.62%	9.43%

Insider and Institutional Ownership

54.5% of BlackBerry shares are held by institutional investors. Comparatively, 9.5% of FalconStor Software shares are held by institutional investors. 1.9% of BlackBerry shares are held by insiders. Comparatively, 52.8% of FalconStor Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

About BlackBerry

BlackBerry Limited provides intelligent security software and services to enterprises and governments worldwide. The company operates through three segments: Cybersecurity, IoT, and Licensing and Other. The company offers CylancePROTECT, an endpoint protection platform and mobile threat defense solution; CylanceOPTICS, an endpoint detection and response solution; CylanceGUARD, a managed detection and response solution; CylanceGATEWAY, an AI-empowered zero-trust network access solution; CylancePERSONA, a user and entity behavior analytics solution; BlackBerry unified endpoint management, a central software component for secure communications platform; BlackBerry Dynamics, a development platform and secure container for mobile applications; and BlackBerry Workspaces solutions. It also provides BlackBerry SecuSUITE, a multi-OS voice and text messaging solution; BlackBerry AtHoc and BlackBerry Alert, which are secure and networked critical event management solutions; BlackBerry QNX that offers real-time operating systems, hypervisors, middleware, development tools, and professional services; BlackBerry Certicom, a cryptography and key management product; BlackBerry Radar, an asset monitoring solution; and BlackBerry IVY, an intelligent vehicle data platform. In addition, the company is involved in the patent licensing and legacy service access fees business. The company has a partnership with Stellar Cyber Inc. to deliver Open XDR for comprehensive threat detection and response. The company was formerly known as Research In Motion Limited and changed its name to BlackBerry Limited in July 2013. BlackBerry Limited was incorporated in 1984 and is headquartered in Waterloo, Canada.

About FalconStor Software

FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. It offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome physical tape libraries for archive related data preservation without being replacing their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. The company also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. It sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. The company was incorporated in 1994 and is headquartered in Austin, Texas.