Analyzing Zuora (NYSE:ZUO) and WaveDancer (NASDAQ:WAVD)

WaveDancer (NASDAQ:WAVD) and Zuora (NYSE:ZUO) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for WaveDancer and Zuora, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WaveDancer	0	0	0	0	0.00
Zuora	0	5	1	0	2.17

Zuora has a consensus target price of $11.33, indicating a potential upside of 13.62%. Given Zuora’s stronger consensus rating and higher possible upside, analysts clearly believe Zuora is more favorable than WaveDancer.

Earnings and Valuation

This table compares WaveDancer and Zuora”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WaveDancer	$7.74 million	0.95	-$2.03 million	N/A	N/A
Zuora	$431.66 million	3.55	-$68.19 million	($0.49)	-20.36

WaveDancer has higher earnings, but lower revenue than Zuora.

Risk and Volatility

WaveDancer has a beta of 3.15, meaning that its share price is 215% more volatile than the S&P 500. Comparatively, Zuora has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Profitability

This table compares WaveDancer and Zuora’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WaveDancer	-17.55%	-57.30%	-27.44%
Zuora	-16.34%	-2.99%	-0.58%

Institutional & Insider Ownership

5.0% of WaveDancer shares are owned by institutional investors. Comparatively, 83.0% of Zuora shares are owned by institutional investors. 22.7% of WaveDancer shares are owned by insiders. Comparatively, 8.6% of Zuora shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Zuora beats WaveDancer on 9 of the 12 factors compared between the two stocks.

About WaveDancer

WaveDancer, Inc. develops and maintains information technology systems in the United States. The company also modernizes client information systems; and offers other IT-related professional services to government and commercial organizations. In addition, it offers IT consulting, development, training, migration, and on-site project support; and software development, system modernizations, cloud services, and cybersecurity services. The company was formerly known as Information Analysis Incorporated and changed its name to WaveDancer, Inc. in December 2021. WaveDancer, Inc. was incorporated in 1979 and is headquartered in Fairfax, Virginia.

About Zuora

Zuora, Inc. provides a monetization suite for modern businesses to help companies launch and scale new services and operate dynamic customer-centric business models. The company offers Zuora Billing that allows customers to deploy various pricing and packaging strategies to monetize their recurring revenue streams, bill customers, calculate prorations when subscriptions change, and automate billing and payment operations; Zuora Revenue, a revenue recognition and automation solution that accounting teams use to manage their complex revenue streams; Zuora Payments to provide payment orchestration services for companies looking to operate globally; and Zephr, a digital subscriber experience platform that helps companies orchestrate dynamic experiences that increase conversion, reduce churn, and nurture ongoing subscriber relationships. It also provides Zuora Platform, an orchestration engine for all subscription data and processes; and other software. The company markets its products through its systems integrators, consultants, and ecosystem partners. Zuora, Inc. was incorporated in 2006 and is headquartered in Redwood City, California.