TCTM Kids IT Education (NASDAQ:VSA) versus DLH (NASDAQ:DLHC) Critical Review

DLH (NASDAQ:DLHC) and TCTM Kids IT Education (NASDAQ:VSA) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Risk and Volatility

DLH has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500. Comparatively, TCTM Kids IT Education has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500.

Earnings and Valuation

This table compares DLH and TCTM Kids IT Education”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLH	$395.94 million	0.22	$7.40 million	$0.32	18.53
TCTM Kids IT Education	$160.41 million	0.03	-$80.36 million	($0.50)	-0.18

DLH has higher revenue and earnings than TCTM Kids IT Education. TCTM Kids IT Education is trading at a lower price-to-earnings ratio than DLH, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for DLH and TCTM Kids IT Education, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLH	1	0	0	0	1.00
TCTM Kids IT Education	1	0	0	0	1.00

Profitability

This table compares DLH and TCTM Kids IT Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DLH	1.27%	4.08%	1.47%
TCTM Kids IT Education	N/A	N/A	N/A

Institutional and Insider Ownership

67.3% of DLH shares are held by institutional investors. Comparatively, 49.8% of TCTM Kids IT Education shares are held by institutional investors. 15.3% of DLH shares are held by company insiders. Comparatively, 32.9% of TCTM Kids IT Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

DLH beats TCTM Kids IT Education on 10 of the 11 factors compared between the two stocks.

About DLH

DLH Holdings Corp. provides technology-enabled business process outsourcing, program management solutions, and public health research and analytics services in the United States. It offers digital transformation and cyber security solutions, including artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation to the National Institutes of Health (NIH), the Defense Health Agency, Tele-medicine and Advanced Technology Research Center, and US Navy Naval Information Warfare Center (NIWC). The company also provides science research and development services and solutions, such as data analytics, testing and evaluation, clinical trials research services, and epidemiology studies to support multiple operating divisions, including NIH and the Center for Disease Control and Prevention, as well as the Military Health System. In addition, it offers system engineering and integration solutions in the areas of pharmaceutical delivery logistics, fire protection engineering, biomedical equipment, and technology engineering on behalf of the Department of Veterans Affairs, NIWC, Health and Human Services, and other federal customers. The company also provides business process management services under the trademarks, e-PRAT and SPOT-m, as well as the registered trademark, Infinibyte for cloud-based solutions. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. DLH Holdings Corp. was incorporated in 1969 and is headquartered in Atlanta, Georgia.

About TCTM Kids IT Education

Tarena International, Inc., through its subsidiaries, provides professional education services through full-time and part-time classes under the Tarena brand in the People’s Republic of China. It operates through two segments, Adult Professional Education and Childhood & Adolescent Quality Education Services. The company offers education courses in 7 information technology (IT) subjects, such as Java, software testing, Linux and network engineering, Big Data, Web front-end development, Python, and network engineer courses; and 3 non-IT subjects, including digital art, online sales and marketing, and visual effects-VFX, as well as live distance instruction, classroom-based tutoring, and online learning modules. It also provides 9 childhood and adolescent quality education programs, including robotics programming, graphical intelligent programming, NOI informatics Olympiad, Python artificial intelligence, high level hardware programming for secondary school, soft and hard programming enlightenment, creative programming starter, and SPIKE starter and advanced under the TongchengTongmei brand. In addition, the company offers online learning platform for education courses and job placement training courses. As of December 31, 2021, it had a network of 100 directly managed learning centers in 44 cities; and 238 TongchengTongmei standalone learning centers in 54 cities. The company was founded in 2002 and is headquartered in Beijing, the People’s Republic of China.