Critical Review: KORE Group (NYSE:KORE) vs. Spok (NASDAQ:SPOK)

Spok (NASDAQ:SPOK) and KORE Group (NYSE:KORE) are both small-cap communication services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Spok and KORE Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spok	0	2	0	0	2.00
KORE Group	1	1	0	0	1.50

Spok currently has a consensus target price of $14.00, indicating a potential upside of 33.59%. KORE Group has a consensus target price of $5.00, indicating a potential downside of 45.95%. Given Spok’s stronger consensus rating and higher probable upside, research analysts plainly believe Spok is more favorable than KORE Group.

Institutional and Insider Ownership

50.8% of Spok shares are held by institutional investors. Comparatively, 57.5% of KORE Group shares are held by institutional investors. 7.3% of Spok shares are held by company insiders. Comparatively, 33.5% of KORE Group shares are held 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.

Risk and Volatility

Spok has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, KORE Group has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Profitability

This table compares Spok and KORE Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spok	9.00%	8.50%	6.08%
KORE Group	-27.37%	N/A	-18.41%

Earnings and Valuation

This table compares Spok and KORE Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spok	$135.97 million	1.61	$15.88 million	$0.58	18.07
KORE Group	$279.62 million	0.58	-$62.98 million	($3.86)	-2.40

Spok has higher earnings, but lower revenue than KORE Group. KORE Group is trading at a lower price-to-earnings ratio than Spok, indicating that it is currently the more affordable of the two stocks.

Summary

Spok beats KORE Group on 9 of the 13 factors compared between the two stocks.

About Spok

Spok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. The company's products and services enhance workflows for clinicians and support administrative compliance. It delivers clinical information to care teams when and where it matters to enhance patient outcomes; and provides GenA Pager, a one-way alphanumeric pager. The company offers subscriptions to one-way or two-way messaging services, as well as alphanumeric pagers that are configurable to support unencrypted or encrypted operation; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers. Its Spok Care Connect suite products for contact centers, clinical alerting and notification, mobile communications and messaging, and public safety notifications. In addition, the company provides professional, software license updates, and product support services, as well as sells third-party equipment. It serves businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company was formerly known as USA Mobility, Inc. and changed its name to Spok Holdings, Inc. in July 2014. Spok Holdings, Inc. was founded in 1986 and is headquartered in Alexandria, Virginia.

About KORE Group

KORE Group Holdings, Inc. provides Internet of Things (IoT) services and solutions worldwide. It offers connectivity and location-based services, device solutions, and managed and professional services that are used in the development and support of IoT technology for the business market. The company’s products include IoT connectivity-as-a-service; connectivity enablement-as-a-service; device management services; and security location based services. It serves customers in healthcare, fleet and vehicle management, asset management, communication services, and industrial/manufacturing sectors. KORE Group Holdings, Inc. was founded in 2002 and is headquartered in Atlanta, Georgia.