Critical Comparison: ShoreTel (SHOR) versus magicJack VocalTec (CALL)
ShoreTel (NASDAQ: SHOR) and magicJack VocalTec (NASDAQ:CALL) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitabiliy, institutional ownership, valuation, dividends, analyst recommendations and risk.
This table compares ShoreTel and magicJack VocalTec’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings for ShoreTel and magicJack VocalTec, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ShoreTel currently has a consensus target price of $10.00, indicating a potential upside of 72.41%. Given ShoreTel’s higher probable upside, analysts plainly believe ShoreTel is more favorable than magicJack VocalTec.
Valuation and Earnings
This table compares ShoreTel and magicJack VocalTec’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ShoreTel||$356.63 million||1.11||$10.14 million||($0.17)||-34.12|
|magicJack VocalTec||$96.90 million||1.20||$11.62 million||($1.13)||-6.42|
magicJack VocalTec has higher revenue, but lower earnings than ShoreTel. ShoreTel is trading at a lower price-to-earnings ratio than magicJack VocalTec, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
ShoreTel has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, magicJack VocalTec has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
Institutional and Insider Ownership
87.2% of ShoreTel shares are owned by institutional investors. Comparatively, 50.4% of magicJack VocalTec shares are owned by institutional investors. 4.0% of ShoreTel shares are owned by insiders. Comparatively, 2.3% of magicJack VocalTec shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
ShoreTel beats magicJack VocalTec on 8 of the 12 factors compared between the two stocks.
ShoreTel Company Profile
ShoreTel, Inc. is a provider of business communication solutions. The Company is engaged in the design, development, marketing and sale of business communication solutions. The Company is focused on the small and medium sized businesses seeking a unified communications (UC) solution allowing them to communicate anytime, anyplace and through any device they chose. The Company provides this to the market through two solutions: ShoreTel Connect, its UC solution, and Contact Center offering and ShoreTel Summit, its platform for developers and integrators. ShoreTel Connect delivers a featured UC solution and applications, such as mobility, collaboration and workgroups. ShoreTel Connect offers three different delivery models, including cloud, onsite and hybrid. Connect Cloud provides a hosted voice solution to its customers. Connect OnSite provides its customers the ability to own and operate their equipment. Connect Hybrid enables its customers to use both its cloud and onsite offerings.
magicJack VocalTec Company Profile
magicJack VocalTec Ltd. and its subsidiaries is a cloud communications company. The Company provides magicJack devices and other magicJack products and services. The Company also provides additional products and services, which include voice applications on smart phones, as well as the magicJack PLUS, magicJack GO and magicJack EXPRESS, which are updated versions of the magicJack device that have their own central processing unit (CPU) and can connect a regular phone directly to the users broadband modem/router and function as a standalone phone without using a computer. The Company’s products and services allow users to make and/or receive free telephone calls to and from anywhere in the world where the customer has broadband access to the Internet, and allows customers to make free calls back to the United States and Canada from anywhere legally permitted in the world.
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