Digital River (NASDAQ: DRIV) and RadiSys Corporation (NASDAQ:RSYS) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitabiliy, institutional ownership, earnings, risk and analyst recommendations.

Institutional & Insider Ownership

58.5% of RadiSys Corporation shares are owned by institutional investors. 4.9% of RadiSys Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Digital River and RadiSys Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital River 0 0 0 0 N/A
RadiSys Corporation 0 0 3 0 3.00

RadiSys Corporation has a consensus target price of $5.25, suggesting a potential upside of 98.86%. Given RadiSys Corporation’s higher possible upside, analysts clearly believe RadiSys Corporation is more favorable than Digital River.

Profitability

This table compares Digital River and RadiSys Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital River 4.52% 4.51% 2.18%
RadiSys Corporation -8.88% -3.27% -1.41%

Valuation and Earnings

This table compares Digital River and RadiSys Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Digital River N/A N/A N/A N/A N/A
RadiSys Corporation $194.86 million 0.53 -$4.31 million ($0.46) -5.74

Digital River has higher revenue, but lower earnings than RadiSys Corporation.

Summary

RadiSys Corporation beats Digital River on 5 of the 8 factors compared between the two stocks.

Digital River Company Profile

Digital River, Inc. (Digital River) is engaged in providing Commerce-as-a-Service solutions. The Company operates through a single segment, being providing solutions to companies that want to sell their products and services online. It provides commerce, payments and marketing solutions to business-to-business (B2B) and business-to-consumer (B2C) digital product and cloud service companies and manufacturers. The Company’s Commerce-as-a-Service suite includes commerce experience, tools and capabilities; Commerce Business Infrastructure (CBI); and marketing services. Its payments solutions offer customers a global payments footprint, including a range of domestic and international payment solutions, 180 global payment methods, 170 international currencies and 50 connections to local banks from across the globe. It provides a range of marketing services including paid search advertising, search engine optimization, affiliate marketing, store optimization and others.

RadiSys Corporation Company Profile

Radisys Corporation (Radisys) is a services acceleration company. The Company’s application aware traffic distribution platforms, real-time media processing products and wireless access technologies enable service providers to virtualize and monetize their networks. The Company’s products and services are organized into two segments: Software-Systems, and Embedded Products and Hardware Services. The Company’s Software-Systems segment consists of three product families: FlowEngine, MediaEngine and CellEngine. Also included in the Software-Systems segment is its Professional Service organization. The Company’s Embedded Products and Hardware Services segment provides customers with hardware based products targeted at the communications and healthcare markets. Products within this segment fall under primary categories, including T-Series Advanced Telecommunications Computing Architecture (ATCA) Platforms, Component Object Model (COM) Express and Rackmount Servers, and Other Products.

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