Cheetah Mobile (NASDAQ:CMCM) and Mitek Systems (MITK) Critical Review

Mitek Systems (NASDAQ: MITK) and Cheetah Mobile (NASDAQ:CMCM) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitabiliy, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Analyst Ratings

This is a summary of current ratings and recommmendations for Mitek Systems and Cheetah Mobile, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitek Systems 0 0 5 0 3.00
Cheetah Mobile 1 1 0 0 1.50

Mitek Systems currently has a consensus target price of $10.60, suggesting a potential upside of 3.92%. Cheetah Mobile has a consensus target price of $9.50, suggesting a potential downside of 14.65%. Given Mitek Systems’ stronger consensus rating and higher probable upside, equities analysts plainly believe Mitek Systems is more favorable than Cheetah Mobile.

Profitability

This table compares Mitek Systems and Cheetah Mobile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitek Systems 5.19% 10.80% 8.99%
Cheetah Mobile 5.34% 8.08% 5.17%

Insider & Institutional Ownership

39.1% of Mitek Systems shares are owned by institutional investors. 8.5% of Mitek Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Mitek Systems and Cheetah Mobile’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mitek Systems $39.46 million 8.63 $5.59 million $0.06 170.03
Cheetah Mobile $686.45 million 2.25 $23.62 million N/A N/A

Cheetah Mobile has higher revenue and earnings than Mitek Systems.

Summary

Mitek Systems beats Cheetah Mobile on 8 of the 11 factors compared between the two stocks.

About Mitek Systems

Mitek Systems, Inc. develops, markets and sells mobile capture and identity verification software solutions for enterprise customers. The Company’s technology allows users to remotely deposit checks, open accounts, get insurance quotes, pay bills, as well as verify their identity by taking pictures of various documents with their camera-equipped smartphones and tablets instead of using the device keyboard. Its technology uses algorithms to correct image distortion, extract relevant data, route images to their desired location and process transactions. Its technology processes images of documents in various ways. The Company’s products include Mobile Verify, Mobile Fill, Mobile Docs, Mobile Deposit and Commercial Mobile Deposit Capture. Its mobile technology solutions are provided in two parts: a software development kit (SDK) for mobile capture, and a software platform for image correction, detection, extraction and authentication.

About Cheetah Mobile

Cheetah Mobile Inc. is a holding company. The Company and its consolidated subsidiaries, variable interest entities (VIEs) and a VIE’s subsidiary are engaged in the provision of online marketing services, Internet value-added services, and Internet security services and others. The Company operates a platform that offers mobile and personal computer (PC) applications for its users and global content promotional channels for its customers, both of which are powered by its cloud-based data analytics engines. For its users, its diversified suite of applications optimizes mobile and PC Internet system performance, and provides real time protection against known and unknown security threats. Its data analytics engines perform real time analysis of mobile applications, program files and Websites on their devices for behavior that may impair system performance or impose security risks.

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