Analyzing Vonage Holdings Corp. (VG) and Hawaiian Telcom Holdco (HCOM)
Vonage Holdings Corp. (NYSE: VG) and Hawaiian Telcom Holdco (NASDAQ:HCOM) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitabiliy, risk, analyst recommendations and institutional ownership.
This is a breakdown of recent ratings and price targets for Vonage Holdings Corp. and Hawaiian Telcom Holdco, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Vonage Holdings Corp.||0||0||6||0||3.00|
|Hawaiian Telcom Holdco||0||1||0||0||2.00|
Vonage Holdings Corp. currently has a consensus price target of $8.25, suggesting a potential upside of 22.95%. Given Vonage Holdings Corp.’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Vonage Holdings Corp. is more favorable than Hawaiian Telcom Holdco.
This table compares Vonage Holdings Corp. and Hawaiian Telcom Holdco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Vonage Holdings Corp.||1.63%||13.56%||6.23%|
|Hawaiian Telcom Holdco||-0.25%||-0.32%||-0.12%|
Valuation & Earnings
This table compares Vonage Holdings Corp. and Hawaiian Telcom Holdco’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vonage Holdings Corp.||$972.14 million||1.53||$100.53 million||$0.06||111.85|
|Hawaiian Telcom Holdco||$388.68 million||0.87||$109.16 million||($0.08)||-364.88|
Hawaiian Telcom Holdco has higher revenue, but lower earnings than Vonage Holdings Corp.. Hawaiian Telcom Holdco is trading at a lower price-to-earnings ratio than Vonage Holdings Corp., indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
77.4% of Vonage Holdings Corp. shares are held by institutional investors. Comparatively, 69.1% of Hawaiian Telcom Holdco shares are held by institutional investors. 14.1% of Vonage Holdings Corp. shares are held by insiders. Comparatively, 26.0% of Hawaiian Telcom Holdco shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
Vonage Holdings Corp. has a beta of -0.01, meaning that its share price is 101% less volatile than the S&P 500. Comparatively, Hawaiian Telcom Holdco has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.
Vonage Holdings Corp. beats Hawaiian Telcom Holdco on 10 of the 13 factors compared between the two stocks.
Vonage Holdings Corp. Company Profile
Vonage Holdings Corp. is a provider of cloud communications services for businesses and consumers, and consumer and communication solutions across multiple devices. The Company operates through two segments: Business and Consumer. For business services customers, the Company provides cloud-based unified communications as a service (UCaaS) solutions, consisting of integrated voice, text, video, data, collaboration, and mobile applications over its scalable session initiation protocol (SIP) based voice over Internet protocol (VoIP) network. It serves a range of the business market, including the small and medium business (SMB), mid-market and enterprise segments. Through its cloud-based middleware solution, gUnify, the Company provides customers the ability to integrate its cloud communications platform with various cloud-based productivity and customer relationship management (CRM) solutions, including Google’s G Suite, Zendesk, Salesforce’s Sales Cloud, Oracle and Clio.
Hawaiian Telcom Holdco Company Profile
Hawaiian Telcom Holdco, Inc. is a provider of communications services and products in Hawaii. The Company operates through two business segments: Telecommunications and Data Center Colocation. The Telecommunications segment provides local telephone service, including voice and data transport, custom calling features, network access, directory assistance and private lines. In addition, the segment provides Internet, long distance services, television service, Internet protocol (IP)-based network services, customer premises equipment, data solutions, managed services, billing and collection, wireless services and pay telephone services. The Data Center Colocation segment consists of data center services, including colocation and virtual private cloud. As of December 31, 2016, its telecommunications operations served approximately 296,000 voice access lines, 19,000 business Voice over Internet Protocol (VoIP) lines, 111,000 high-speed Internet lines, and 42,000 video subscribers.
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