Financial Analysis: Ruckus Wireless (RKUS) versus Gogo (GOGO)
Ruckus Wireless (NYSE: RKUS) and Gogo (NASDAQ:GOGO) are both small-cap telecommunications services companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Insider & Institutional Ownership
69.9% of Gogo shares are owned by institutional investors. 37.3% of Gogo shares are owned by company 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.
This is a summary of current recommendations for Ruckus Wireless and Gogo, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Gogo has a consensus price target of $14.19, suggesting a potential upside of 31.73%. Given Gogo’s higher possible upside, analysts clearly believe Gogo is more favorable than Ruckus Wireless.
This table compares Ruckus Wireless and Gogo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Ruckus Wireless and Gogo’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Gogo||$596.55 million||1.57||-$124.50 million||($1.99)||-5.41|
Ruckus Wireless has higher earnings, but lower revenue than Gogo. Gogo is trading at a lower price-to-earnings ratio than Ruckus Wireless, indicating that it is currently the more affordable of the two stocks.
Gogo beats Ruckus Wireless on 6 of the 9 factors compared between the two stocks.
Ruckus Wireless Company Profile
Ruckus Wireless, Inc. is a supplier of advanced (Wi-Fi) solutions. The Company’s solutions, which it call Smart Wi-Fi, are used by service providers and enterprises to solve a range of network capacity, coverage and reliability challenges associated with wireless traffic demands. It operates through selling controllers and access points along with related software and services segment. The Company markets and sells its products and technology through a network of channel partners to a variety of service providers and enterprises around the world. Its Smart Wi-Fi solutions offer features and functionality, such as enhanced reliability, extended range and scalability. Its products include controllers, indoor and outdoor access points, wireless bridges, controller software platforms, software management solutions, including reporting and analytics, and Wi-Fi-related cloud services, such as location-based positioning, and certificate-based security and on-boarding of Wi-Fi devices.
Gogo Company Profile
Gogo Inc. is a holding company. The Company is a provider of in-flight broadband connectivity and connectivity-enabled services to commercial and business aviation. The Company operates through three segments: Commercial Aviation North America (CA-NA), Commercial Aviation Rest of World (CA-ROW) and Business Aviation (BA). The CA-NA segment offers air-to-ground (ATG) and satellite connectivity and entertainment services to commercial aircraft flying routes generally within North America. The CA-ROW segment offers satellite connectivity and entertainment services, using 2Ku and Ku solutions, to commercial aircraft flying routes outside of North America. The Company’s BA segment offers a suite of integrated equipment, network and Internet connectivity products and services to the business aviation market. As of December 31, 2016, it provided services on 2,943 commercial aircraft. The Company offers a package of airborne equipment for its ATG-4/ATG and satellite services.
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