Critical Analysis: Upland Software (NASDAQ:UPLD) and Sangoma Technologies (NASDAQ:SANG)

Sangoma Technologies (NASDAQ:SANG) and Upland Software (NASDAQ:UPLD) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Valuation & Earnings

This table compares Sangoma Technologies and Upland Software”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sangoma Technologies	$212.62 million	0.64	-$5.01 million	($0.19)	-21.66
Upland Software	$201.91 million	0.06	-$38.90 million	($7.00)	-0.62

Sangoma Technologies has higher revenue and earnings than Upland Software. Sangoma Technologies is trading at a lower price-to-earnings ratio than Upland Software, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sangoma Technologies has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Upland Software has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Sangoma Technologies and Upland Software, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sangoma Technologies	2	1	1	0	1.75
Upland Software	1	0	3	0	2.50

Sangoma Technologies currently has a consensus target price of $4.00, suggesting a potential downside of 2.79%. Upland Software has a consensus target price of $31.67, suggesting a potential upside of 633.87%. Given Upland Software’s stronger consensus rating and higher probable upside, analysts plainly believe Upland Software is more favorable than Sangoma Technologies.

Institutional and Insider Ownership

39.7% of Sangoma Technologies shares are owned by institutional investors. Comparatively, 77.8% of Upland Software shares are owned by institutional investors. 14.0% of Sangoma Technologies shares are owned by insiders. Comparatively, 14.8% of Upland Software shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Sangoma Technologies and Upland Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sangoma Technologies	-3.04%	-2.26%	-1.71%
Upland Software	-7.08%	-51.46%	5.88%

Summary

Upland Software beats Sangoma Technologies on 8 of the 14 factors compared between the two stocks.

About Sangoma Technologies

Sangoma Technologies Corporation develops, manufactures, distributes, and supports voice and data connectivity components for software-based communication applications worldwide. The company offers Switchvox, a voice over internet protocol phone system; Switchvox Cloud, a unified communications solution, as well as provides cloud communication solutions. It offers SIP Trunking, a telephone service for one or multiple locations; PBXact Cloud, a centralized internet based solution; Asterisk and FreePBX, an open source IP PBX software; and FAXStation, a fax-over-IP solution. In addition, the company provides desk phone, DECT phones, and headset related products. Further, it offers VoIP gateways, session border controllers, telephony card, and managed service provider services. Sangoma Technologies Corporation was founded in 1984 and is headquartered in Markham, Canada.

About Upland Software

Upland Software, Inc., together with its subsidiaries, provides cloud-based software applications under the Upland brand name in the United States, the United Kingdom, Canada, and internationally. It offers software applications that enable organizations to plan, manage and execute projects, and work in the areas of marketing, sales, contact center, knowledge management, project management, information technology, business operations, human resources, and legal. The company also provides professional services, such as implementation, data extraction, integration and configuration, and training services, as well as customer support services. It serves corporations, government agencies, and small and medium-sized businesses in the financial, consulting, technology, manufacturing, media, telecommunication, insurance, non-profit healthcare, life sciences, retail, and hospitality sectors. The company was formerly known as Silverback Enterprise Group, Inc. and changed its name to Upland Software, Inc. in November 2013. Upland Software, Inc. was incorporated in 2010 and is headquartered in Austin, Texas.