Critical Review: KLDiscovery (OTCMKTS:KLDI) versus Yalla


KLDiscovery (OTCMKTS:KLDI – Get Rating) and Yalla Group (NYSE:YALA – Get Rating) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Risk and Volatility

KLDiscovery has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Yalla Group has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Earnings & Valuation

This table compares KLDiscovery and Yalla Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KLDiscovery $320.48 million 0.85 -$60.54 million ($1.29) -4.96
Yalla Group $273.14 million 2.26 $82.59 million $0.45 9.29

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

Institutional and Insider Ownership

53.7% of KLDiscovery shares are owned by institutional investors. Comparatively, 22.2% of Yalla Group shares are owned by institutional investors. 50.2% of KLDiscovery shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares KLDiscovery and Yalla Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KLDiscovery -16.91% -36.03% -4.80%
Yalla Group 28.99% 24.77% 22.08%

Analyst Ratings

This is a summary of current ratings and price targets for KLDiscovery and Yalla Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KLDiscovery 0 0 0 0 N/A
Yalla Group 0 0 1 0 3.00

Yalla Group has a consensus target price of $25.00, indicating a potential upside of 498.09%. Given Yalla Group’s higher possible upside, analysts plainly believe Yalla Group is more favorable than KLDiscovery.

Summary

Yalla Group beats KLDiscovery on 10 of the 13 factors compared between the two stocks.

About KLDiscovery (Get Rating)

KLDiscovery Inc. provides eDiscovery, information governance, and data recovery solutions to corporations, law firms, government agencies, and individual consumers worldwide. The company offers eDiscovery solutions, including Nebula Ecosystem, an information governance and eDiscovery platform, which helps to facilitate the identification, preservation, collection, processing, review, and exchange of electronically stored information (ESI); eDiscovery.com Review, a platform used to search, review and exchange ESI; and Relativity, a document review tool. It also provides KLD Analytics, which offers technology-assisted review tools for predictive coding, workflow, email threading, near-duplicate detection, and language identification; KLD Processing, a processing platform; technology enabled managed review services; digital forensics services; and information archiving services. In addition, the company offers advisory services, such as eDiscovery readiness and response solutions, including eDiscovery expert witness, custodian interviews, preservation and collection strategy, and legal hold solution; information governance solutions comprising Office 365 health check and legal hold process improvement; and data privacy solutions, including privacy compliance assessment and data breach risk mitigation. Further, it provides data recovery services; email recovery services; tape services comprising backup infrastructure migration and consolidation, legacy tape and data remediation, and recovery from physically-damaged and quickly-erased or partially-overwritten tapes; and data destruction services. Additionally, the company provides data recovery software, such as Ontrack EasyRecovery and Ontrack PowerControls. KLDiscovery Inc. was founded in 1985 and is headquartered in McLean, Virginia.

About Yalla Group (Get Rating)

Yalla Group Limited operates a voice-centric social networking and entertainment platform under the Yalla name primarily in the Middle East and North Africa region. Its platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.



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