Lesaka Technologies (NASDAQ:LSAK) and SmartRent (NYSE:SMRT) Critical Analysis

Lesaka Technologies (NASDAQ:LSAK) and SmartRent (NYSE:SMRT) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

24.2% of Lesaka Technologies shares are owned by institutional investors. Comparatively, 59.4% of SmartRent shares are owned by institutional investors. 3.4% of Lesaka Technologies shares are owned by company insiders. Comparatively, 2.3% of SmartRent shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Lesaka Technologies and SmartRent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lesaka Technologies	-7.87%	-28.23%	-7.74%
SmartRent	-39.76%	-12.81%	-8.90%

Earnings & Valuation

This table compares Lesaka Technologies and SmartRent”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lesaka Technologies	$328.70 million	1.24	-$87.50 million	($0.63)	-7.70
SmartRent	$152.33 million	1.72	-$60.56 million	($0.32)	-4.27

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

Volatility & Risk

Lesaka Technologies has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, SmartRent has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Lesaka Technologies and SmartRent, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lesaka Technologies	1	1	0	0	1.50
SmartRent	1	2	0	0	1.67

SmartRent has a consensus price target of $1.45, suggesting a potential upside of 6.23%. Given SmartRent’s stronger consensus rating and higher possible upside, analysts clearly believe SmartRent is more favorable than Lesaka Technologies.

Summary

SmartRent beats Lesaka Technologies on 9 of the 13 factors compared between the two stocks.

About Lesaka Technologies

Lesaka Technologies, Inc. operates as a Fintech company that utilizes its proprietary banking and payment technologies to deliver financial services solutions to merchants (B2B) and consumers (B2C) in Southern Africa. It offers cash management solutions, growth capital, card acquiring, bill payment technologies, and value-added services to formal and informal retail merchants, as well as banking, lending, and insurance solutions to consumers across Southern Africa. The company also engages in the sale of POS devices, SIM cards, and other consumables; and license of rights to use certain technology developed by the company, as well as offers related technology services. The company was formerly known as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies, Inc. in May 2022. Lesaka Technologies, Inc. was incorporated in 1997 and is headquartered in Johannesburg, South Africa.

About SmartRent

SmartRent, Inc., an enterprise software company, provides an integrated smart home operating system to residential property owners and operators, homebuilders, institutional home buyers, developers, and residents in the United States. The company’s products and solutions include smart apartments and homes, access control for buildings, common areas, and rental units, asset protection and monitoring, parking management, self-guided tours, and community and resident Wi-Fi. It also offers professional services to customers, which include training, installation, and support services. The company was founded in 2017 and is headquartered in Scottsdale, Arizona.