Mimecast Limited (MIME) versus The KEYW Holding Corporation (KEYW) Critical Analysis

Mimecast Limited (NASDAQ: MIME) and The KEYW Holding Corporation (NASDAQ:KEYW) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Valuation & Earnings

This table compares Mimecast Limited and The KEYW Holding Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mimecast Limited $203.26 million 7.55 $4.83 million ($0.13) -207.62
The KEYW Holding Corporation $333.35 million 1.14 $22.16 million ($0.44) -17.32

The KEYW Holding Corporation has higher revenue and earnings than Mimecast Limited. Mimecast Limited is trading at a lower price-to-earnings ratio than The KEYW Holding Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mimecast Limited and The KEYW Holding Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mimecast Limited -3.73% -9.67% -3.93%
The KEYW Holding Corporation -6.39% -1.61% -0.82%

Institutional & Insider Ownership

47.7% of Mimecast Limited shares are owned by institutional investors. Comparatively, 92.0% of The KEYW Holding Corporation shares are owned by institutional investors. 4.6% of The KEYW Holding Corporation shares are owned by company 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.

Volatility and Risk

Mimecast Limited has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, The KEYW Holding Corporation has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Mimecast Limited and The KEYW Holding Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mimecast Limited 0 1 12 0 2.92
The KEYW Holding Corporation 0 2 3 0 2.60

Mimecast Limited currently has a consensus target price of $31.08, suggesting a potential upside of 15.17%. The KEYW Holding Corporation has a consensus target price of $12.33, suggesting a potential upside of 61.85%. Given The KEYW Holding Corporation’s higher possible upside, analysts clearly believe The KEYW Holding Corporation is more favorable than Mimecast Limited.

Summary

The KEYW Holding Corporation beats Mimecast Limited on 8 of the 13 factors compared between the two stocks.

About Mimecast Limited

Mimecast Limited is a provider of cloud security and risk management services for corporate information and e-mail. The Company’s suite of cloud services protects customers from the business and data security risks. It also mitigates the business disruption that e-mail failure or downtime causes. In addition, its archiving services secure, store and manage critical corporate communications and information to address the compliance and e-discovery requirements. It has developed its cloud architecture to offer customers e-mail security, continuity and archiving capabilities in a single service. It has developed an operating system (OS) called Mime OS for native cloud services. It protects inbound and outbound e-mail from malware, spam, threats, e-mail denial of service (DoS) and distributed denial of service (DDoS), data leaks and other security threats. It also offers service bundles, and Mimecast mobile and desktop applications.

About The KEYW Holding Corporation

The KeyW Holding Corporation is a holding company. The Company is a provider of engineering and technology solutions to support the collection, processing, analysis and dissemination of information across the full spectrum of the Intelligence, cyber and counterterrorism communities missions. It operates through Government Solutions segment. Its solutions are designed to meet the needs of agile intelligence and the United States government national security priorities through a range of cyber operations and training, geospatial intelligence, cloud and data analytics, engineering, and intelligence analysis and operations offerings. Its Intelligence Surveillance and Reconnaissance solution suite is deployed from a sensor delivery platform. It includes products, including electro-optical, hyperspectral and synthetic aperture radar sensors, and other products that it manufactures and integrates with hardware and software to meet evolving intelligence mission requirements.

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