Analyzing SoundThinking (NASDAQ:SSTI) and Rectitude (NASDAQ:RECT)

Rectitude (NASDAQ:RECT) and SoundThinking (NASDAQ:SSTI) are both small-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Institutional & Insider Ownership

60.7% of SoundThinking shares are held by institutional investors. 10.4% of SoundThinking shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Rectitude and SoundThinking’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rectitude	N/A	N/A	N/A
SoundThinking	-9.74%	-13.76%	-7.36%

Earnings and Valuation

This table compares Rectitude and SoundThinking”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rectitude	$32.57 million	0.89	$1.66 million	N/A	N/A
SoundThinking	$102.75 million	0.76	-$9.18 million	($0.84)	-7.32

Rectitude has higher earnings, but lower revenue than SoundThinking.

Analyst Recommendations

This is a summary of current ratings and target prices for Rectitude and SoundThinking, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rectitude	1	0	0	0	1.00
SoundThinking	1	2	5	0	2.50

SoundThinking has a consensus target price of $17.67, suggesting a potential upside of 187.26%. Given SoundThinking’s stronger consensus rating and higher possible upside, analysts clearly believe SoundThinking is more favorable than Rectitude.

Volatility and Risk

Rectitude has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500. Comparatively, SoundThinking has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

SoundThinking beats Rectitude on 7 of the 12 factors compared between the two stocks.

About Rectitude

Rectitude Holdings Ltd is principally involved in the provision of safety equipment, encompassing essential items such as personal protective clothing, gloves, safety footwear, personal fall arrest systems, portable fire extinguishers and traffic products. The Company also offers auxiliary products such as industrial hardware tools and electrical hardware required for construction sites. Rectitude Holdings Ltd is based in SINGAPORE.

About SoundThinking

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.