Ribbon Communications (NASDAQ:RBBN) and Palo Alto Networks (NYSE:PANW) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.
Insider & Institutional Ownership
65.3% of Ribbon Communications shares are owned by institutional investors. Comparatively, 80.8% of Palo Alto Networks shares are owned by institutional investors. 1.0% of Ribbon Communications shares are owned by insiders. Comparatively, 2.3% of Palo Alto Networks shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Ribbon Communications and Palo Alto Networks' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Ribbon Communications | -24.39% | -34.72% | -14.49% |
| Palo Alto Networks | -8.36% | -8.66% | -1.16% |
Analyst Recommendations
This is a summary of recent ratings and price targets for Ribbon Communications and Palo Alto Networks, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Ribbon Communications | 0 | 0 | 2 | 0 | 3.00 |
| Palo Alto Networks | 1 | 2 | 28 | 0 | 2.87 |
Ribbon Communications currently has a consensus price target of $10.00, indicating a potential upside of 27.06%. Palo Alto Networks has a consensus price target of $381.3030, indicating a potential upside of 5.92%. Given Ribbon Communications' stronger consensus rating and higher possible upside, equities research analysts clearly believe Ribbon Communications is more favorable than Palo Alto Networks.
Volatility & Risk
Ribbon Communications has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Palo Alto Networks has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.
Earnings and Valuation
This table compares Ribbon Communications and Palo Alto Networks' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Ribbon Communications | $563.11 million | 2.06 | $-130,070,000.00 | ($1.19) | -6.61 |
| Palo Alto Networks | $3.41 billion | 10.27 | $-267,000,000.00 | ($1.24) | -290.32 |
Ribbon Communications has higher earnings, but lower revenue than Palo Alto Networks. Palo Alto Networks is trading at a lower price-to-earnings ratio than Ribbon Communications, indicating that it is currently the more affordable of the two stocks.
Summary
Palo Alto Networks beats Ribbon Communications on 9 of the 14 factors compared between the two stocks.
