Digital Turbine (NASDAQ: APPS) and Gigamon (NYSE:GIMO) are both small-cap technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Risk & Volatility

Digital Turbine has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Gigamon has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares Digital Turbine and Gigamon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Turbine -20.41% -23.85% -13.37%
Gigamon -0.32% -0.55% -0.38%

Earnings & Valuation

This table compares Digital Turbine and Gigamon’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Turbine $91.55 million 1.42 -$24.26 million ($0.30) -6.03
Gigamon $310.86 million 4.62 $49.43 million ($0.04) -962.50

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Digital Turbine and Gigamon, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Turbine 0 0 4 0 3.00
Gigamon 0 9 1 0 2.10

Digital Turbine presently has a consensus price target of $1.63, suggesting a potential downside of 10.22%. Gigamon has a consensus price target of $45.35, suggesting a potential upside of 17.79%. Given Gigamon’s higher possible upside, analysts clearly believe Gigamon is more favorable than Digital Turbine.

Institutional & Insider Ownership

20.8% of Digital Turbine shares are owned by institutional investors. Comparatively, 97.9% of Gigamon shares are owned by institutional investors. 5.8% of Digital Turbine shares are owned by insiders. Comparatively, 4.5% of Gigamon shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Gigamon beats Digital Turbine on 10 of the 14 factors compared between the two stocks.

About Digital Turbine

Digital Turbine, Inc. is engaged in delivering end-to-end products and solutions for mobile operators, application advertisers, device original equipment manufacturers (OEMs) and other third parties to enable them to monetize mobile content. The Company operates its business in two operating segments: Advertising and Content. The Advertising segment consists of two businesses: Operator and OEM (O&O) and Advertiser and Publisher (A&P). The O&O business is an advertiser solution for carrier and OEM inventory consisting of services, such as Ignite, a mobile device management platform and Discover, an intelligent application discovery platform. Its A&P business is a mobile user acquisition network across the world consisting of services, such as syndicated network and real time bidding (RTB). The Content segment consists of services, including Marketplace, which is an application and content store, and Pay, which is a content management and mobile payment solution.

About Gigamon

Gigamon Inc. offers a solution that delivers visibility and control of data-in-motion traversing enterprise, federal and service provider networks. The Company’s Visibility Platform consists of a distributed system of nodes (that in combination establish a Visibility Fabric). The Visibility Platform includes physical appliances and virtual nodes that can be deployed in data centers, central offices, virtualized/private cloud/public cloud environments, and small form-factor remote site appliances, which in combination enable pervasive visibility of network infrastructures. Its GigaSECURE Security Delivery Platform enables security teams and information technology (IT) personnel to gain visibility into their IT infrastructure by forwarding selected traffic of interest from network, server and remote location infrastructure to security, management, analysis and compliance tools in a manner that is optimized for specific uses or functions.

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