Smith Micro Software (NASDAQ:SMSI) and Lightspeed Commerce (NYSE:LSPD) Critical Analysis

Lightspeed Commerce (NYSE:LSPD) and Smith Micro Software (NASDAQ:SMSI) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Volatility and Risk

Lightspeed Commerce has a beta of 2.33, suggesting that its share price is 133% more volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Valuation and Earnings

This table compares Lightspeed Commerce and Smith Micro Software’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lightspeed Commerce	$909.27 million	2.35	-$163.96 million	($1.07)	-13.03
Smith Micro Software	$40.86 million	0.52	-$24.40 million	($5.36)	-0.41

Smith Micro Software has lower revenue, but higher earnings than Lightspeed Commerce. Lightspeed Commerce is trading at a lower price-to-earnings ratio than Smith Micro Software, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Lightspeed Commerce and Smith Micro Software, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lightspeed Commerce	0	12	6	1	2.42
Smith Micro Software	0	0	2	0	3.00

Lightspeed Commerce presently has a consensus target price of $18.78, indicating a potential upside of 34.70%. Smith Micro Software has a consensus target price of $28.00, indicating a potential upside of 1,172.73%. Given Smith Micro Software’s stronger consensus rating and higher possible upside, analysts plainly believe Smith Micro Software is more favorable than Lightspeed Commerce.

Institutional & Insider Ownership

68.7% of Lightspeed Commerce shares are held by institutional investors. Comparatively, 20.8% of Smith Micro Software shares are held by institutional investors. 10.0% of Smith Micro Software shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Lightspeed Commerce and Smith Micro Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lightspeed Commerce	-18.03%	-2.02%	-1.89%
Smith Micro Software	-135.79%	-16.04%	-13.31%

Summary

Lightspeed Commerce beats Smith Micro Software on 10 of the 14 factors compared between the two stocks.

About Lightspeed Commerce

Lightspeed Commerce Inc. engages in sale of cloud-based software subscriptions and payments solutions for small and midsize businesses, retailers, restaurants, and golf course operators in North America, Europe, the United Kingdom, Australia, New Zealand, and internationally. Its Software as a Service platform enables customers to engage with consumers, manage operations, accept payments, etc. The company's cloud platforms are designed interrelated elements, such as omni-channel consumer experience, a comprehensive back-office operations management suite to improve customers' efficiency and insight, and the facilitation of payments. Its platform functionalities include full omni-channel capabilities, point of sale (POS), product and menu management, employee and inventory management, analytics and reporting, multi-location connectivity, order-ahead and curbside pickup functionality, loyalty, and customer management solutions. The company also offers tailored financial solutions, such as Lightspeed Retail, Lightspeed eCommerce, Lightspeed Restaurant, and Lightspeed B2B solutions. In addition, it sells hardware, including tablets, customer facing displays, receipt printers, networking hardware, cash drawers, payment terminals, servers, stands, bar-code scanners, and an assortment of accessories, as well as provides installation and implementation services. The company was formerly known as Lightspeed POS Inc. and changed its name to Lightspeed Commerce Inc. in August 2021. Lightspeed Commerce Inc. was incorporated in 2005 and is headquartered in Montreal, Canada.

About Smith Micro Software

Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.