Financial Review: Runway Growth Finance (NASDAQ:RWAY) and Sphere 3D (NASDAQ:ANY)

Runway Growth Finance (NASDAQ:RWAY) and Sphere 3D (NASDAQ:ANY) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Runway Growth Finance and Sphere 3D, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	0	5	3	0	2.38
Sphere 3D	0	0	1	0	3.00

Runway Growth Finance presently has a consensus price target of $11.96, suggesting a potential upside of 9.91%. Sphere 3D has a consensus price target of $3.00, suggesting a potential upside of 183.02%. Given Sphere 3D’s stronger consensus rating and higher probable upside, analysts clearly believe Sphere 3D is more favorable than Runway Growth Finance.

Profitability

This table compares Runway Growth Finance and Sphere 3D’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	27.05%	12.91%	6.33%
Sphere 3D	-50.87%	-49.54%	-34.72%

Volatility and Risk

Runway Growth Finance has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Sphere 3D has a beta of 2.99, suggesting that its share price is 199% more volatile than the S&P 500.

Valuation and Earnings

This table compares Runway Growth Finance and Sphere 3D”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$53.67 million	7.57	$44.34 million	$1.04	10.46
Sphere 3D	$21.66 million	1.19	-$23.41 million	($0.80)	-1.33

Runway Growth Finance has higher revenue and earnings than Sphere 3D. Sphere 3D is trading at a lower price-to-earnings ratio than Runway Growth Finance, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

64.6% of Runway Growth Finance shares are owned by institutional investors. Comparatively, 17.3% of Sphere 3D shares are owned by institutional investors. 1.7% of Runway Growth Finance shares are owned by company insiders. Comparatively, 5.6% of Sphere 3D shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Runway Growth Finance beats Sphere 3D on 10 of the 14 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

About Sphere 3D

Sphere 3D Corp. engages in the bitcoin mining business. It is involved with digital asset mining pool operators to provide computing power to the mining pools. The company is based in Stamford, Connecticut.