Head-To-Head Comparison: Golden Matrix Group (NASDAQ:GMGI) vs. Red Cat (NASDAQ:RCAT)

Red Cat (NASDAQ:RCAT) and Golden Matrix Group (NASDAQ:GMGI) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Red Cat and Golden Matrix Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	0	0	1	0	3.00
Golden Matrix Group	0	0	0	0	0.00

Red Cat currently has a consensus target price of $4.00, indicating a potential downside of 50.31%. Given Red Cat’s stronger consensus rating and higher possible upside, research analysts plainly believe Red Cat is more favorable than Golden Matrix Group.

Profitability

This table compares Red Cat and Golden Matrix Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Cat	-232.62%	-96.00%	-75.95%
Golden Matrix Group	-3.07%	-3.93%	-2.11%

Volatility & Risk

Red Cat has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Golden Matrix Group has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Red Cat and Golden Matrix Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$16.47 million	39.18	-$24.05 million	($0.54)	-14.91
Golden Matrix Group	$45.24 million	5.64	N/A	N/A	N/A

Golden Matrix Group has higher revenue and earnings than Red Cat.

Institutional & Insider Ownership

38.0% of Red Cat shares are held by institutional investors. Comparatively, 2.7% of Golden Matrix Group shares are held by institutional investors. 21.5% of Red Cat shares are held by insiders. Comparatively, 23.2% of Golden Matrix Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Red Cat beats Golden Matrix Group on 6 of the 11 factors compared between the two stocks.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.

About Golden Matrix Group

Golden Matrix Group, Inc. provides enterprise software-as-a-service solutions for online casino and sports betting operators. The company develops and owns online gaming intellectual property; and builds gaming platforms for customers located primarily in the Asia Pacific region. Its platform facilitates gaming customers in operating online casinos, sportsbooks, lottery, and live games; and provides customers with access to a portfolio of licensed gaming content, which are provided by gaming content providers. The company also provides services and resells third party gaming content to licensed online gaming distributors. Its platform is accessed through desktop and mobile applications. The company was formerly known as Source Gold Corp. and changed its name to Golden Matrix Group, Inc. in April 2016. Golden Matrix Group, Inc. was incorporated in 2008 and is based in Las Vegas, Nevada.