Critical Comparison: Red Cat (NASDAQ:RCAT) versus BIO-key International (NASDAQ:BKYI)

Red Cat (NASDAQ:RCAT) and BIO-key International (NASDAQ:BKYI) are both small-cap business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Profitability

This table compares Red Cat and BIO-key International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Cat	-162.50%	-66.19%	-58.99%
BIO-key International	-93.18%	-673.82%	-111.89%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Red Cat and BIO-key International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	0	0	1	0	3.00
BIO-key International	0	0	0	0	0.00

Red Cat presently has a consensus target price of $4.00, indicating a potential upside of 12.04%. Given Red Cat’s stronger consensus rating and higher possible upside, equities analysts plainly believe Red Cat is more favorable than BIO-key International.

Risk and Volatility

Red Cat has a beta of -0.07, meaning that its stock price is 107% less volatile than the S&P 500. Comparatively, BIO-key International has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Institutional and Insider Ownership

38.0% of Red Cat shares are owned by institutional investors. Comparatively, 26.5% of BIO-key International shares are owned by institutional investors. 21.5% of Red Cat shares are owned by company insiders. Comparatively, 5.8% of BIO-key International shares are owned by company 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.

Valuation & Earnings

This table compares Red Cat and BIO-key International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$18.86 million	14.27	-$24.05 million	($0.46)	-7.76
BIO-key International	$7.76 million	0.30	-$8.52 million	N/A	N/A

BIO-key International has lower revenue, but higher earnings than Red Cat.

Summary

Red Cat beats BIO-key International on 9 of the 12 factors compared between the two stocks.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.

About BIO-key International

BIO-key International, Inc. develops and markets fingerprint identification biometric technology and software solutions, and enterprise-ready identity access management solutions for commercial, government, and education customers in the United States and internationally. The company offers BIO-key PortalGuard and PortalGuard IDaaS solutions, a customer-controlled and neutral-by-design cloud-based identity platform that allows customers to integrate with any cloud or on-premises SaaS application, as well as windows device authentication through IAM platform. Its solutions enable its customers to secure their workforces and student populations; and make their partner networks more collaborative. In addition, it provides BIO-key VST and WEB-key products; and Civil and Large-Scale ID Infrastructure solutions that develops finger-based biometric technology. Further, it offers finger scanners for enterprise and consumer markets under SideSwipe, EcoID, and SidePass brand names. The company was formerly known as SAC Technologies and changed its name to BIO-key International, Inc. in 2002. BIO-key International, Inc. was founded in 1993 and is headquartered in Wall, New Jersey.