Synchronoss Technologies (NASDAQ: SNCR) and Rackspace Hosting (NYSE:RAX) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of recent ratings and price targets for Synchronoss Technologies and Rackspace Hosting, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchronoss Technologies 1 5 2 0 2.13
Rackspace Hosting 1 9 2 0 2.08

Synchronoss Technologies presently has a consensus target price of $26.00, suggesting a potential upside of 60.59%. Rackspace Hosting has a consensus target price of $31.17, suggesting a potential downside of 2.57%. Given Synchronoss Technologies’ stronger consensus rating and higher possible upside, equities analysts clearly believe Synchronoss Technologies is more favorable than Rackspace Hosting.

Earnings & Valuation

This table compares Synchronoss Technologies and Rackspace Hosting’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Synchronoss Technologies $476.75 million 1.49 $54.33 million $0.44 36.80
Rackspace Hosting N/A N/A N/A $1.15 27.82

Synchronoss Technologies has higher revenue and earnings than Rackspace Hosting. Rackspace Hosting is trading at a lower price-to-earnings ratio than Synchronoss Technologies, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

90.4% of Synchronoss Technologies shares are owned by institutional investors. Comparatively, 78.0% of Rackspace Hosting shares are owned by institutional investors. 11.0% of Synchronoss Technologies shares are owned by company insiders. Comparatively, 15.5% of Rackspace Hosting shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Synchronoss Technologies and Rackspace Hosting’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Synchronoss Technologies 3.38% 11.20% 6.21%
Rackspace Hosting 6.84% 14.85% 7.14%

Volatility and Risk

Synchronoss Technologies has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, Rackspace Hosting has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

About Synchronoss Technologies

Synchronoss Technologies, Inc. is a global software and services company, which provides technologies and services for the mobile transformation of business. The Company’s portfolio in the Consumer and Enterprise markets contains offerings, such as personal cloud, secure-mobility, identity management and scalable messaging platforms, products and solutions. Its products and platforms are designed to enable multiple converged communication services to be managed across a range of distribution channels, including e-commerce, m-commerce, telesales, customer stores, indirect and other retail outlets. The Company operates in and markets their solutions and services directly through their sales organizations in North America, Europe, the Middle East and Africa (EMEA), Latin America and the Asia-Pacific region. It delivers technologies for mobile transformation to service provider and enterprise customers in regulated verticals and use cases.

About Rackspace Hosting

Rackspace Hosting, Inc. (Rackspace) operates in the managed cloud segment of the business information technology (IT) market. The Company offers a portfolio of integrated IT solutions for common business needs. The Company offers services for certain applications, including e-commerce and Web content management sites, business-productivity applications, such as e-mail and collaboration, and data stores. The Company offers private, public and hybrid clouds in its approximately 10 data centers located on over four continents, in Microsoft Azure and Amazon Web Services data centers, as well as in customer-owned data centers. Its services include dedicated customer care and technical support, such as operating system patching, application monitoring, network and firewall configurations, and identity management. The Company has operations located in multiple cities across the United States, as well as in London, Amsterdam, Zurich, Hong Kong, Sydney and Mexico City.

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