Analyzing DIRTT Environmental Solutions (NASDAQ:DRTT) and Cloudflare (NYSE:NET)

Cloudflare (NYSE:NETGet Rating) and DIRTT Environmental Solutions (NASDAQ:DRTTGet Rating) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Volatility & Risk

Cloudflare has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, DIRTT Environmental Solutions has a beta of 2.35, indicating that its share price is 135% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cloudflare and DIRTT Environmental Solutions’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cloudflare $656.43 million 20.48 -$260.31 million ($0.83) -49.65
DIRTT Environmental Solutions $147.59 million 0.57 -$53.67 million ($0.75) -1.30

DIRTT Environmental Solutions has lower revenue, but higher earnings than Cloudflare. Cloudflare is trading at a lower price-to-earnings ratio than DIRTT Environmental Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

70.0% of Cloudflare shares are owned by institutional investors. Comparatively, 88.9% of DIRTT Environmental Solutions shares are owned by institutional investors. 20.7% of Cloudflare shares are owned by company insiders. Comparatively, 6.7% of DIRTT Environmental Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Cloudflare and DIRTT Environmental Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cloudflare 1 11 11 0 2.43
DIRTT Environmental Solutions 0 2 2 0 2.50

Cloudflare presently has a consensus price target of $130.36, suggesting a potential upside of 216.33%. DIRTT Environmental Solutions has a consensus price target of $2.59, suggesting a potential upside of 165.93%. Given Cloudflare’s higher probable upside, analysts plainly believe Cloudflare is more favorable than DIRTT Environmental Solutions.

Profitability

This table compares Cloudflare and DIRTT Environmental Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cloudflare -35.83% -17.74% -6.23%
DIRTT Environmental Solutions -41.05% -87.63% -33.22%

Summary

Cloudflare beats DIRTT Environmental Solutions on 8 of the 14 factors compared between the two stocks.

Cloudflare Company Profile (Get Rating)

CloudFlare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company offers an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices. Its security products comprise cloud firewall, bot management, distributed denial of service, IoT, SSL/TLS, secure origin connection, and rate limiting products. The company also offers performance solutions, which include content delivery and intelligent routing, as well as content, mobile, and image optimization solutions. In addition, it provides reliability solutions comprising load balancing, anycast network, virtual backbone, DNS, DNS resolver, online, and virtual waiting room solutions. Further, the company offers Cloudflare internal infrastructure solutions, including on-ramps, which connect users, devices, or locations to its network; and filters, which are the products that protect, inspect, and privilege data. Additionally, it provides developer-based solutions, such as serverless computing/programmable network, website development, domain registration, Cloudflare apps, analytics, and data localization management; Consumer DNS Resolver, a consumer app to browse the Internet; and Consumer VPN for consumers to secure and accelerate traffic on mobile devices. The company serves customers in the technology, healthcare, financial services, consumer and retail, and non-profit industries, as well as government. CloudFlare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

DIRTT Environmental Solutions Company Profile (Get Rating)

DIRTT Environmental Solutions Ltd. designs, manufactures, and installs prefabricated interior solutions for use in commercial spaces across various industries and businesses in the United States, Canada, internationally. Its ICE software interior construction software provides end-to-end integration, design, order engineering, manufacturing, and installation services. The company's interior construction solutions include prefabricated, customized interior modular walls, ceilings, and floors; decorative and functional millwork; power infrastructure; network infrastructure; and pre-installed medical gas piping systems. It offers interior construction solutions through a network of independent distribution partners. It serves commercial, healthcare, education, hospitality, and other industries, as well as medical gas piping systems for healthcare. DIRTT Environmental Solutions Ltd. was incorporated in 2003 and is headquartered in Calgary, Canada.

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