RCM Technologies (NASDAQ:RCMT) versus Atlantic International (NASDAQ:ATLN) Critical Analysis

RCM Technologies (NASDAQ:RCMT) and Atlantic International (NASDAQ:ATLN) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Risk & Volatility

RCM Technologies has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500. Comparatively, Atlantic International has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Insider and Institutional Ownership

43.2% of RCM Technologies shares are held by institutional investors. 26.4% of RCM Technologies shares are held by company insiders. Comparatively, 22.3% of Atlantic International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for RCM Technologies and Atlantic International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RCM Technologies	0	0	1	1	3.50
Atlantic International	0	0	0	0	0.00

RCM Technologies currently has a consensus price target of $33.50, indicating a potential upside of 64.78%. Given RCM Technologies’ stronger consensus rating and higher probable upside, equities analysts clearly believe RCM Technologies is more favorable than Atlantic International.

Earnings & Valuation

This table compares RCM Technologies and Atlantic International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RCM Technologies	$278.38 million	0.54	$16.83 million	$1.67	12.17
Atlantic International	$442.61 million	0.34	-$5.63 million	($6.63)	-0.45

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

Profitability

This table compares RCM Technologies and Atlantic International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RCM Technologies	5.77%	58.70%	13.76%
Atlantic International	N/A	-298.20%	-42.32%

Summary

RCM Technologies beats Atlantic International on 13 of the 15 factors compared between the two stocks.

About RCM Technologies

RCM Technologies, Inc. provides business and technology solutions in the United States, Canada, Puerto Rico, and Europe. It operates through three segments: Engineering, Specialty Health Care, and Life Sciences and Information Technology. The Engineering segment offers a range of engineering services, including project management engineering and design, engineering analysis, engineer-procure-construct, configuration management, hardware/software validation and verification, quality assurance, technical writing and publications, manufacturing process planning and improvement, and 3D/BIM integrated design. The Specialty Health Care segment provides long-term and short-term staffing, executive search, international recruitment, and placement services in the fields of allied and therapy staffing, correctional healthcare staffing, health information management, nursing services, physician and advanced practice, school staffing and recruitment, and telepractice. The Life Sciences and Information Technology segment offers enterprise business solutions, application services, IT infrastructure solutions, life sciences solutions, and other vertical market specific solutions; and data solutions, digitization, recruiting process outsourcing, human capital management solutions, workforce management, and consulting services. The company serves aerospace and defense, energy, financial services, health care, life sciences, manufacturing and distribution, and technology industries, as well as educational institutions and the public sector. RCM Technologies, Inc. was founded in 1971 and is based in Pennsauken, New Jersey.

About Atlantic International

Atlantic International Corp. engages in the design, development, and manufacture of genetic analysis technologies. Its services include RNA sequencing and DNA sequencing. The company was founded by William C. St. Laurent and Daniel R. Jones in 2013 and is headquartered in Billercia, MA.