Immersion (IMMR) and Crossroads Systems (CRDSQ) Critical Analysis

Immersion (NASDAQ: IMMR) and Crossroads Systems (OTCMKTS:CRDSQ) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Earnings and Valuation

This table compares Immersion and Crossroads Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Immersion $57.09 million 3.60 -$39.38 million ($2.45) -2.87
Crossroads Systems N/A N/A N/A ($1.08) -2.50

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

Volatility & Risk

Immersion has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Crossroads Systems has a beta of 2.74, suggesting that its share price is 174% more volatile than the S&P 500.

Insider and Institutional Ownership

79.0% of Immersion shares are held by institutional investors. Comparatively, 7.5% of Crossroads Systems shares are held by institutional investors. 7.2% of Immersion shares are held by company insiders. Comparatively, 27.4% of Crossroads Systems shares are held by company 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Immersion and Crossroads Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Immersion 0 1 4 0 2.80
Crossroads Systems 0 0 0 0 N/A

Immersion currently has a consensus target price of $10.75, indicating a potential upside of 52.92%. Given Immersion’s higher probable upside, equities research analysts plainly believe Immersion is more favorable than Crossroads Systems.

Profitability

This table compares Immersion and Crossroads Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Immersion -190.18% -100.50% -43.28%
Crossroads Systems -518.75% -22.99% -7.88%

About Immersion

Immersion Corporation is a licensing company focused on the creation, design, development and licensing of haptic technologies that allow people to use their sense of touch when operating digital devices. The Company develops, licenses and supports a range of software and intellectual property (IP). It is focused on the markets, including mobile devices, wearables, consumer, mobile entertainment and other content; console gaming; automotive; medical, and commercial. It provides advanced tactile software, related tools and technical assistance to certain customers, and offers licenses to its patented IP to other customers. Its licenses enable customers to deploy haptically-enabled devices, content and other offerings, which they sell under own brand names. It holds patents, covering digital technologies and including ways in which touch-related technology can be incorporated into and between hardware products and components, systems software, application software, and digital content.

About Crossroads Systems

Crossroads Systems, Inc. is an intellectual property licensing company. The Company’s intellectual property assets are identified in two distinct categories: the first category is known as the 972 patent family and the second category is known as the non-972 patents. As of October 31, 2016, the 972 patent family consisted of 31 patents and pending patents that are primarily concentrated around access controls. As of October 31, 2016, the non-972 patents consisted of 140 patents and pending patents that are primarily directed to five product families: optimizing command processing, enabling interoperability, managing networks, enhancing tape libraries and improving data systems. As of October 31, 2016, approximately 50 companies have licensed 972 patents from the Company. The Company’s subsidiaries include Crossroads Systems (Texas), Inc. and Crossroads Europe GmbH.

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