Franklin Wireless (NASDAQ:FKWL – Get Free Report) and Radcom (NASDAQ:RDCM – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.
Profitability
This table compares Franklin Wireless and Radcom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Franklin Wireless | -3.68% | -4.48% | -3.29% |
| Radcom | 14.14% | 9.96% | 7.42% |
Institutional & Insider Ownership
18.5% of Franklin Wireless shares are held by institutional investors. Comparatively, 48.3% of Radcom shares are held by institutional investors. 31.1% of Franklin Wireless shares are held by insiders. Comparatively, 69.0% of Radcom shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Franklin Wireless | 0 | 0 | 0 | 0 | 0.00 |
| Radcom | 0 | 0 | 1 | 0 | 3.00 |
Radcom has a consensus price target of $18.00, indicating a potential upside of 35.75%. Given Radcom’s stronger consensus rating and higher probable upside, analysts plainly believe Radcom is more favorable than Franklin Wireless.
Valuation and Earnings
This table compares Franklin Wireless and Radcom”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Franklin Wireless | $45.28 million | 1.11 | -$3.96 million | ($0.14) | -30.57 |
| Radcom | $61.01 million | 3.40 | $6.97 million | $0.58 | 22.86 |
Radcom has higher revenue and earnings than Franklin Wireless. Franklin Wireless is trading at a lower price-to-earnings ratio than Radcom, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Franklin Wireless has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, Radcom has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.
Summary
Radcom beats Franklin Wireless on 14 of the 14 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 Radcom
RADCOM Ltd. provides 5G ready cloud-native, network intelligence, and service assurance solutions for telecom operators or communication service providers (CSPs). It offers RADCOM ACE, including RADCOM Service Assurance, a cloud-native, 5G-ready, and virtualized service assurance solutions, which allows telecom operators to gain end-to-end network visibility and customer experience insights across all networks; RADCOM Network Visibility, a cloud-native network packet broker and filtering solution that allows CSPs to manage network traffic at scale across multiple cloud environments, and control the visibility layer to perform analysis of select datasets; and RADCOM Network Insights, a business intelligence solution that offers insights for multiple use cases enabled by data captured and correlated through RADCOM Network Visibility and RADCOM Service Assurance. The company also provides solutions for mobile and fixed networks, such as 5G, long term evolution (LTE), voice over LTE, voice over Wifi, IP multimedia subsystem, voice over IP, and universal mobile telecommunication service. It sells its products directly to customers through executives and sales representatives, as well as through a network of distributors and resellers in North America, Asia Pacific, Latin America, Europe, the Middle East, Africa, and Israel. The company was formerly known as Big Blue Catalogue Ltd. and changed its name to RADCOM Ltd. in 1989. RADCOM Ltd. was incorporated in 1985 and is headquartered in Tel Aviv, Israel.
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