Head-To-Head Analysis: Cass Information Systems (NASDAQ:CASS) & Paltalk (NASDAQ:PALT)

Cass Information Systems (NASDAQ:CASS) and Paltalk (NASDAQ:PALT) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Insider & Institutional Ownership

59.1% of Cass Information Systems shares are owned by institutional investors. Comparatively, 3.9% of Paltalk shares are owned by institutional investors. 2.4% of Cass Information Systems shares are owned by company insiders. Comparatively, 17.8% of Paltalk shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Cass Information Systems has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Paltalk has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cass Information Systems and Paltalk’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cass Information Systems	$197.51 million	2.79	$30.06 million	$2.19	18.46
Paltalk	$10.98 million	3.13	-$1.07 million	($0.09)	-41.44

Cass Information Systems has higher revenue and earnings than Paltalk. Paltalk is trading at a lower price-to-earnings ratio than Cass Information Systems, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cass Information Systems and Paltalk’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cass Information Systems	15.21%	13.67%	1.23%
Paltalk	-7.45%	-4.07%	-3.45%

Analyst Ratings

This is a summary of recent recommendations for Cass Information Systems and Paltalk, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cass Information Systems	0	0	1	0	3.00
Paltalk	0	0	1	0	3.00

Cass Information Systems currently has a consensus price target of $51.00, suggesting a potential upside of 26.14%. Paltalk has a consensus price target of $4.50, suggesting a potential upside of 20.64%. Given Cass Information Systems’ higher probable upside, analysts clearly believe Cass Information Systems is more favorable than Paltalk.

Summary

Cass Information Systems beats Paltalk on 9 of the 12 factors compared between the two stocks.

About Cass Information Systems

Cass Information Systems, Inc. provides payment and information processing services to manufacturing, distribution, and retail enterprises in the United States. The company operates through two segments, Information Services and Banking Services. Its services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. The company also processes and pays facility-related invoices, such as electricity, gas, waste, and telecommunications expenses; and provides telecom expense management solutions, as well as church management software solution and on-line platform to provide generosity services for faith-based and non-profit organizations. In addition, the company, through its banking subsidiary, Cass Commercial Bank, provides a range of banking products and services, such as demand, savings, time, and money market deposits; commercial, industrial, commercial real estate, and construction and land development loans; and cash management services to privately held businesses, restaurant franchises, and faith-related ministries. Further, it provides B2B payment platform for clients that require an agile fintech partner. It operates through its banking facility near downtown St. Louis, Missouri; operating branch in the Bridgeton, Missouri; and leased facilities in Colorado Springs, Colorado. The company was formerly known as Cass Commercial Corporation and changed its name to Cass Information Systems, Inc. in January 2001. Cass Information Systems, Inc. was founded in 1906 and is headquartered in Saint Louis, Missouri.

About Paltalk

Paltalk, Inc., together with its subsidiaries, develops communications software and multimedia social applications worldwide. It offers consumer applications, which include Paltalk, Camfrog, and Tinychat for live video chat; and owns and operates Vumber, a telecommunications services provider that enables users to have multiple phone numbers in any area code through which calls can be forwarded to a user's existing cell phone or land line telephone number. The company provides ManyCam, a live streaming software and virtual camera that allows users to deliver professional live videos on streaming platforms, video conferencing applications, and distance learning tools; and product payment options, where users can pay by credit card, PayPal, western union, check, local e-wallet providers, or complete an in-app purchase through the Apple App Store or Google Play Store for Android users. The company was formerly known as PeerStream, Inc. and changed its name to Paltalk, Inc. in May 2020. Paltalk, Inc. was incorporated in 2005 and is based in Jericho, New York.