Cambium Networks (NASDAQ:CMBM) and Sierra Wireless (NASDAQ:SWIR) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.
Risk and Volatility
Cambium Networks has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 2.36, meaning that its share price is 136% more volatile than the S&P 500.
Profitability
This table compares Cambium Networks and Sierra Wireless' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Cambium Networks | 2.70% | 21.92% | 5.48% |
| Sierra Wireless | -10.39% | -14.35% | -7.98% |
Earnings and Valuation
This table compares Cambium Networks and Sierra Wireless' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Cambium Networks | $267.03 million | 4.76 | $-17,600,000.00 | ($0.31) | -155.84 |
| Sierra Wireless | $713.51 million | 0.76 | $-70,540,000.00 | ($1.02) | -14.41 |
Cambium Networks has higher earnings, but lower revenue than Sierra Wireless. Cambium Networks is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
12.1% of Cambium Networks shares are owned by institutional investors. Comparatively, 46.4% of Sierra Wireless shares are owned by institutional investors. 78.7% of Cambium Networks shares are owned by company insiders. Comparatively, 2.0% of Sierra Wireless shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations for Cambium Networks and Sierra Wireless, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Cambium Networks | 0 | 1 | 7 | 0 | 2.88 |
| Sierra Wireless | 2 | 5 | 4 | 0 | 2.18 |
Cambium Networks currently has a consensus target price of $45.3750, suggesting a potential downside of 6.08%. Sierra Wireless has a consensus target price of $19.6818, suggesting a potential upside of 33.89%. Given Sierra Wireless' higher possible upside, analysts plainly believe Sierra Wireless is more favorable than Cambium Networks.
Summary
Cambium Networks beats Sierra Wireless on 10 of the 14 factors compared between the two stocks.
