Turtle Beach (NASDAQ:TBCH) and Knightscope (NASDAQ:KSCP) Critical Analysis

Knightscope (NASDAQ:KSCP) and Turtle Beach (NASDAQ:TBCH) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Profitability

This table compares Knightscope and Turtle Beach’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knightscope	-284.42%	N/A	-129.83%
Turtle Beach	1.41%	9.18%	3.88%

Analyst Ratings

This is a summary of current ratings and target prices for Knightscope and Turtle Beach, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knightscope	0	0	2	0	3.00
Turtle Beach	0	0	1	0	3.00

Knightscope presently has a consensus price target of $16.50, indicating a potential upside of 297.59%. Turtle Beach has a consensus price target of $21.00, indicating a potential upside of 45.03%. Given Knightscope’s higher probable upside, equities research analysts plainly believe Knightscope is more favorable than Turtle Beach.

Valuation and Earnings

This table compares Knightscope and Turtle Beach”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knightscope	$11.01 million	1.31	-$22.12 million	($13.58)	-0.31
Turtle Beach	$372.77 million	0.78	-$17.68 million	$0.77	18.81

Turtle Beach has higher revenue and earnings than Knightscope. Knightscope is trading at a lower price-to-earnings ratio than Turtle Beach, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

14.6% of Knightscope shares are held by institutional investors. Comparatively, 67.0% of Turtle Beach shares are held by institutional investors. 15.4% of Knightscope shares are held by insiders. Comparatively, 5.1% of Turtle Beach shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Knightscope has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Turtle Beach has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Summary

Turtle Beach beats Knightscope on 9 of the 13 factors compared between the two stocks.

About Knightscope

Knightscope, Inc. designs, develops, manufactures, markets, deploys, and supports autonomous security robots (ASR) in the United States. Its products include K3 and K5 ASRs designed to roam a geo-fenced area autonomously by utilizing numerous sensors and lasers, either on a random basis or based on a particular patrolling algorithm to navigate around people, vehicles, and objects in dynamic indoor or outdoor environments; K1, an ASR for used in indoors or outdoors and at ingress/egress points for both people and vehicles; and K7, a multi-terrain ASR. The company also develops and operates the Knightscope security operations center (KSOC), a browser-based interface, which allows real-time data access service to its clients for alert of an abnormal event; and Knightscope network operations center (KNOC), a custom set of tools that enables it to manage and monitor the network of ASRs with alerts related to critical indicators and statistics, including charging, software, navigation, and temperatures, as well as to execute over-the-air software upgrades, patches, and other related items. In addition, it offers Knightscope+, a virtual monitoring and response solution that provides an alternative for client sites. The company serves airports, commercial real estate, corporate campus, homeowner associations, hotels, universities, municipalities, rail, healthcare, public parks, schools, casinos, corporations, logistics, manufacturing, law enforcement, Parking areas, municipalities, universities, and property management companies, as well as the U.S. federal government. Knightscope, Inc. was incorporated in 2013 and is headquartered in Mountain View, California.

About Turtle Beach

Turtle Beach Corporation operates as an audio technology company. It develops, commercializes, and markets gaming headset solutions for various platforms, including video game and entertainment consoles, personal computers, handheld consoles, tablets, and mobile devices under the Turtle Beach brand. The company also offers gaming headsets, keyboards, mice, mousepads, and other accessories for the personal computer peripherals market under the brand of ROCCAT, as well as digital USB and analog microphones under the Neat Microphones brand. It serves retailers, distributors, and other customers in North America, the United Kingdom, Europe, and internationally. The company was founded in 1975 and is headquartered in White Plains, New York.