Head-To-Head Comparison: SecureWorks (NASDAQ:SCWX) versus KWESST Micro Systems (NASDAQ:KWE)

SecureWorks (NASDAQ:SCWX) and KWESST Micro Systems (NASDAQ:KWE) 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 valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Valuation and Earnings

This table compares SecureWorks and KWESST Micro Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SecureWorks	$365.88 million	2.04	-$86.04 million	($0.85)	-9.88
KWESST Micro Systems	$1.55 million	18.08	-$6.90 million	($1.28)	-1.98

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

Volatility and Risk

SecureWorks has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, KWESST Micro Systems has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SecureWorks and KWESST Micro Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SecureWorks	1	1	0	0	1.50
KWESST Micro Systems	0	0	0	0	N/A

SecureWorks currently has a consensus target price of $7.00, indicating a potential downside of 16.67%. Given SecureWorks’ higher probable upside, analysts plainly believe SecureWorks is more favorable than KWESST Micro Systems.

Profitability

This table compares SecureWorks and KWESST Micro Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SecureWorks	-21.23%	-4.94%	-3.43%
KWESST Micro Systems	-711.72%	-478.39%	-144.50%

Insider & Institutional Ownership

14.4% of SecureWorks shares are owned by institutional investors. Comparatively, 21.4% of KWESST Micro Systems shares are owned by institutional investors. 81.5% of SecureWorks shares are owned by 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.

Summary

SecureWorks beats KWESST Micro Systems on 7 of the 12 factors compared between the two stocks.

About SecureWorks

SecureWorks Corp., through its subsidiaries, provides technology-driven information security solutions for protecting its customers in the United States and internationally. The company's solutions include software-as-a-service solutions; managed security services; and professional services, including incident response and penetration testing services. Its solutions enable organizations to prevent security breaches, detect malicious activity, respond rapidly to security breaches, and identify emerging threats. The company sells its solutions primarily through its referral agents, regional value-added resellers, trade associations, and managed security service providers. It serves customers in a range of industries, including financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. SecureWorks Corp. was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. is a subsidiary of Dell Marketing L.P.

About KWESST Micro Systems

KWESST Micro Systems Inc. engages in the development and commercialization of tactical systems and ammunitions for military, public safety agencies, and personal defense markets. It provides non-lethal products, including PARA OPS devices and ARWEN products. The company was incorporated in 2017 and is headquartered in Ottawa, Canada.