Financial Review: Veritone (NASDAQ:VERI) versus LM Funding America (NASDAQ:PWCM)

Veritone (NASDAQ:VERI) and LM Funding America (NASDAQ:PWCM) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Earnings and Valuation

This table compares Veritone and LM Funding America”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veritone	$92.19 million	0.99	-$111.73 million	($0.38)	-2.39
LM Funding America	$8.85 million	0.24	-$26.92 million	($60.51)	-0.02

LM Funding America has lower revenue, but higher earnings than Veritone. Veritone is trading at a lower price-to-earnings ratio than LM Funding America, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Veritone has a beta of 2.26, suggesting that its share price is 126% more volatile than the S&P 500. Comparatively, LM Funding America has a beta of 2.34, suggesting that its share price is 134% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Veritone and LM Funding America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veritone	1	1	3	0	2.40
LM Funding America	1	0	0	0	1.00

Veritone presently has a consensus target price of $6.12, suggesting a potential upside of 575.68%. Given Veritone’s stronger consensus rating and higher probable upside, analysts plainly believe Veritone is more favorable than LM Funding America.

Profitability

This table compares Veritone and LM Funding America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Veritone	-111.90%	-159.15%	-39.63%
LM Funding America	-413.92%	-132.69%	-78.02%

Institutional & Insider Ownership

39.2% of Veritone shares are owned by institutional investors. Comparatively, 22.7% of LM Funding America shares are owned by institutional investors. 7.4% of Veritone shares are owned by insiders. Comparatively, 15.0% of LM Funding America shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Veritone beats LM Funding America on 9 of the 14 factors compared between the two stocks.

About Veritone

Veritone, Inc., together with its subsidiaries, engages in the provision of artificial intelligence (AI) computing solutions and services in the United States, the United Kingdom, France, Australia, Israel, and India. It develops and operates aiWARE platform, an AI operating system, that uses machine learning algorithms or AI models designed to mimic human cognitive functions, such as perception, prediction, and problem solving and optimization, as well as enables users to transform unstructured data into structured data, and analyze and optimize data to drive business processes and insights. The company also provides media advertising agency services, including media planning and strategy, media buying and placement, campaign messaging, clearance verification and attribution, and custom analytics directly to advertisers through outbound sales networking, and client and partner referrals, as well as indirectly through advertising agencies or marketing consultants. It serves media and entertainment, government, legal and compliance, energy, and other vertical markets. The company was formerly known as Veritone Delaware, Inc. and changed its name to Veritone, Inc. in July 2014. Veritone, Inc. was incorporated in 2014 and is headquartered in Denver, Colorado.

About LM Funding America

LM Funding America, Inc. operates as a cryptocurrency mining and specialty finance company. It operates through two segments, Specialty Finance and Mining Operations. The company also engages in Bitcoin mining operations; and provides funding to nonprofit community associations. The company was founded in 2008 and is based in Tampa, Florida.