Head-To-Head Comparison: Digimarc (DMRC) & Aerohive Networks (NYSE:HIVE)

Digimarc (NASDAQ:DMRC) and Aerohive Networks (NYSE:HIVE) are both small-cap industrial products companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of current ratings and price targets for Digimarc and Aerohive Networks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digimarc 0 1 2 0 2.67
Aerohive Networks 0 1 0 0 2.00

Digimarc presently has a consensus target price of $39.67, indicating a potential downside of 31.67%. Given Digimarc’s stronger consensus rating and higher probable upside, research analysts plainly believe Digimarc is more favorable than Aerohive Networks.

Valuation & Earnings

This table compares Digimarc and Aerohive Networks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digimarc $21.19 million 33.22 -$32.51 million ($2.86) -20.30
Aerohive Networks $154.91 million 1.25 -$18.34 million ($0.29) -11.90

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

Institutional & Insider Ownership

58.2% of Digimarc shares are held by institutional investors. Comparatively, 59.1% of Aerohive Networks shares are held by institutional investors. 6.4% of Digimarc shares are held by company insiders. Comparatively, 9.4% of Aerohive Networks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Digimarc and Aerohive Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digimarc -154.70% -55.04% -50.23%
Aerohive Networks -12.93% -94.44% -12.20%

Risk and Volatility

Digimarc has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Aerohive Networks has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Summary

Aerohive Networks beats Digimarc on 9 of the 14 factors compared between the two stocks.

Digimarc Company Profile

Digimarc Corporation provides media identification and management solutions to government and commercial customers in the United States and internationally. It offers Digimarc Intuitive Computing Platform, a comprehensive set of technologies for identifying, discovering, and interacting with digitally-enhanced media, which includes Digimarc Barcode, a method for imperceptibly enhancing packaging, print, images, thermal labels, audio, and other objects with data that is detected by enabled devices, such as smart phones, computers, barcode scanners, and machine-vision equipment. The company also provides Digimarc Discover software that enables an ecosystem of connected devices to identify content or materials and deliver information. Its solutions are used in various media identification and management products and solutions, such as retail point of sale transaction processing; track and trace of products within the supply chain; quality control in manufacturing processes; counterfeiting and piracy deterrence; online e-publication piracy protection; content identification and media management; authentication and monitoring; linking to networks and providing access to information; and enhanced services in support of mobile commerce. The company provides its solutions directly and through its business partners. Digimarc Corporation was founded in 2008 and is based in Beaverton, Oregon.

Aerohive Networks Company Profile

Aerohive Networks, Inc., together with its subsidiaries, designs and develops cloud networking and enterprise Wi-Fi solutions in the Americas, Europe, the Middle East and Africa, and the Asia Pacific. The company provides hardware products, such as wireless access points, branch routers, and switches; tiered maintenance and support services comprising technical support, bug fixes, access to priority hardware replacement service, and unspecified upgrades; and Software as a Service subscriptions, including comparable maintenance and support services. Its cloud-based product comprises HiveManager, a network management application that features an updated user interface, improved troubleshooting, and expanded access to data and analytics, as well as an upgraded cloud-deployment platform. The company sells its products to industry verticals, including education, distributed enterprises, retail, hospitality, and healthcare through a network of authorized distributors, value-added resellers, and managed service providers. Aerohive Networks, Inc. was incorporated in 2006 and is headquartered in Milpitas, California.

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