Financial Analysis: ImageWare Systems (OTCMKTS:IWSY) and Sapiens International (NASDAQ:SPNS)

Sapiens International (NASDAQ:SPNS) and ImageWare Systems (OTCMKTS:IWSY) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Profitability

This table compares Sapiens International and ImageWare Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sapiens International	12.14%	16.92%	10.87%
ImageWare Systems	N/A	N/A	N/A

Volatility and Risk

Sapiens International has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, ImageWare Systems has a beta of 2.39, suggesting that its stock price is 139% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sapiens International and ImageWare Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sapiens International	1	0	2	0	2.33
ImageWare Systems	0	0	0	0	N/A

Sapiens International presently has a consensus target price of $34.33, suggesting a potential upside of 13.76%.

Earnings and Valuation

This table compares Sapiens International and ImageWare Systems’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sapiens International	$514.58 million	3.23	$62.44 million	$1.12	26.95
ImageWare Systems	$3.47 million	0.00	$9.28 million	N/A	N/A

Sapiens International has higher revenue and earnings than ImageWare Systems.

Insider & Institutional Ownership

27.2% of Sapiens International shares are owned by institutional investors. Comparatively, 3.0% of ImageWare Systems shares are owned by institutional investors. 16.0% of Sapiens International shares are owned by company insiders. Comparatively, 37.7% of ImageWare Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Sapiens International beats ImageWare Systems on 7 of the 9 factors compared between the two stocks.

About Sapiens International

Sapiens International Corporation N.V. provides software solutions for the insurance industry in North America, the United Kingdom, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides various solutions for property and casualty commercial and personal lines, life and pensions, and reinsurance fields. It offers IDITSuite, an AI powered, end-to-end insurance software; DigitalSuite, a cloud-native, future-proof digital engagement platform; IDITGo, a pre-configured, data-enriched insurance launch and accelerator platform solutions; consultancy services for property and casualty commercial lines; and Tia Enterprise solution for customer engagement. The company also provides CoreSuite, an end-to-end cloud and digital PAS for individual and group products across life, health, wealth, and pensions; CustomerConnect, a dynamic self-service and persona-based portal to engage with insureds; AgentConnect, a portal for agents and brokers to focus on sales enablement, customer retention, and increasing customer value; and ReinsuranceMaster, a reinsurance automation software that provides insurers full financial control and flexibility over their entire reinsurance process. The company was founded in 1982 and is headquartered in Holon, Israel.

About ImageWare Systems

ImageWare Systems, Inc. operates as a biometric solution provider in the United States and internationally. It offers Imageware Biometric Engine, a biometric identity and authentication database built for multi-biometric enrollment, management, and authentication. The company also provides Imageware Proof that enables an entity to prove user identity from their biometrics, government issued ID, and credit bureau data; Imageware Capture that enables the capture of biographic and biometric details, such as face, fingerprint, palm print, and iris, as well as scars, marks, and tattoos; Imageware Identify, which enables a user to identify others from their biometrics; and Imageware Investigate that enables an officer to create digital lineups. In addition, it offers Imageware Credential that enables a user to design, build, and print badges for access control systems, which includes tickets, smart badges, wristbands, personal identity verification cards, and others; Imageware Digital ID, a decentralized identity service that enables self-sovereign identity underpinned by blockchain technology tied to biometrics; and Imageware Authenticate, which enables users to leverage multimodal biometrics hosted in a central server or cloud to log in to services and applications from a device. Further, the company provides Law Enforcement 2.0 solution which enables state, local, and federal agencies to capture, archive, search, retrieve, and share digital images, fingerprints, and other biometrics, as well as criminal history records on a stand-alone, networked, wireless or browser-based platform. It serves airports and seaports, education, financial, government, healthcare, and law enforcement industries. The company was incorporated in 1987 and is headquartered in San Diego, California.