KLDiscovery (OTCMKTS:KLDI) & Fathom (NASDAQ:FTHM) Critical Comparison

KLDiscovery (OTCMKTS:KLDI) and Fathom (NASDAQ:FTHM) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings & Valuation

This table compares KLDiscovery and Fathom”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KLDiscovery	$345.80 million	0.00	-$34.81 million	($1.32)	0.00
Fathom	$420.48 million	0.07	-$20.31 million	($0.73)	-1.26

Fathom has higher revenue and earnings than KLDiscovery. Fathom is trading at a lower price-to-earnings ratio than KLDiscovery, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares KLDiscovery and Fathom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KLDiscovery	N/A	N/A	N/A
Fathom	-4.83%	-49.25%	-25.17%

Insider & Institutional Ownership

20.4% of KLDiscovery shares are held by institutional investors. Comparatively, 55.5% of Fathom shares are held by institutional investors. 31.6% of KLDiscovery shares are held by insiders. Comparatively, 16.4% of Fathom shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

KLDiscovery has a beta of -0.98, indicating that its stock price is 198% less volatile than the S&P 500. Comparatively, Fathom has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for KLDiscovery and Fathom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KLDiscovery	0	0	0	0	0.00
Fathom	1	0	0	1	2.50

Fathom has a consensus target price of $2.50, suggesting a potential upside of 171.24%. Given Fathom’s stronger consensus rating and higher possible upside, analysts plainly believe Fathom is more favorable than KLDiscovery.

Summary

Fathom beats KLDiscovery on 9 of the 14 factors compared between the two stocks.

About KLDiscovery

KLDiscovery Inc. provides eDiscovery, information governance, and data recovery solutions to corporations, law firms, insurance companies, and individuals worldwide. The company offers Nebula, an end-to-end eDiscovery solution that facilitates smarter ways to cull, process, review, and manage documents in an intuitive interface; Client Portal for consolidated visualizations and reporting for portfolio intelligence; KLD Processing, a proprietary processing application; ReadySuite to perform extensive QC on a production, normalize inbound submissions, or spot check the work of a colleague or supplier; Relativity for relativity enhancements and state-of-the-art HIVE infrastructure; Nebula Processing to process data with a higher degree of quality; and Nebula AI, a technology assisted review tool combined with a deep bench of experts, as well as managed services, remote document review, and managed document review services. It also provides computer forensics, ransomware data recovery, remote collection manager, data recovery, and data collection services. In addition, the company offers Nebula Archive, an advanced archiving solution for modern enterprise data management needs at scale; Nebula Intelligent Archive, a digital communications compliance platform with machine learning and analytics; and Office 365 Migration and Management, as well as information governance and advisory services. Further, it provides Ontrack EasyRecovery that allows clients to perform precise file recovery of data lost through deletion, reformatting, and various other data loss scenarios; Ontrack PowerControls, a granular restore software product; email extraction, tape solutions, and data destruction solutions; and professional services. KLDiscovery Inc. was founded in 1985 and is headquartered in Eden Prairie, Minnesota.

About Fathom

Fathom Holdings Inc. provides a real estate services platform that integrates residential brokerage, mortgage, title, and insurance services in the United States. It operates through three segments: Real Estate Brokerage, Mortgage, and Technology. The Real Estate Brokerage segment provides real estate brokerage services. The Mortgage segment offers residential loan origination and underwriting services. The Technology segment provides Software as a Service solutions and data mining for third party customers. It offers access to various properties for sale or lease through its FathomRealty.com website to buyers, sellers, landlords, and tenants; insurance agency services; and title services. In addition, the company provides intelliAgent, a real estate technology platform that offers a suite of brokerage and agent level tools, technology, business processes, business intelligence and reporting, and training; transaction, personnel, customer relationship, and accounting management for agent transactions; and reporting, social media marketing, and other marketing and marketing repository services, as well as marketplace for add-on services and third-party technology. Its brands include Fathom Realty, Dagley Insurance, Encompass Lending, intelliAgent, LiveBy, Real Results, Verus Title, and Cornerstone. The company was founded in 2010 and is headquartered in Cary, North Carolina.