Head-To-Head Comparison: RealNetworks (RNWK) versus Sourcefire (FIRE)

RealNetworks (NASDAQ: RNWK) and Sourcefire (NASDAQ:FIRE) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Valuation and Earnings

This table compares RealNetworks and Sourcefire’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RealNetworks $120.47 million 1.01 -$36.55 million ($0.73) -4.48
Sourcefire N/A N/A N/A N/A N/A

Sourcefire has lower revenue, but higher earnings than RealNetworks.

Insider & Institutional Ownership

51.9% of RealNetworks shares are owned by institutional investors. 37.9% of RealNetworks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for RealNetworks and Sourcefire, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealNetworks 0 0 1 0 3.00
Sourcefire 0 0 0 0 N/A

RealNetworks currently has a consensus price target of $6.50, indicating a potential upside of 98.78%. Sourcefire has a consensus price target of $2.50, indicating a potential downside of 17.76%. Given RealNetworks’ higher possible upside, equities research analysts clearly believe RealNetworks is more favorable than Sourcefire.

Profitability

This table compares RealNetworks and Sourcefire’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RealNetworks -21.67% -32.64% -21.89%
Sourcefire N/A N/A N/A

Summary

RealNetworks beats Sourcefire on 5 of the 8 factors compared between the two stocks.

RealNetworks Company Profile

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

Sourcefire Company Profile

Sourcefire, Inc. (Sourcefire) is engaged in the business of delivering intelligent cybersecurity technologies. The Company provides a portfolio of solutions that enables commercial enterprises and government agencies worldwide to manage and minimize cybersecurity risks. Sourcefire provides customers with Agile Security that consists of hardware with embedded software, software and cloud-based solutions. It sells its solutions to a customer base that includes Global 2000 companies, global enterprises, the United States and international government agencies, and small and mid-size businesses. During the year ended December 31, 2012, it generated approximately 67% of the Company’s revenue from customers in the United States, and 33% of the Company’s revenue from customers outside of the United States. As of December 31, 2012, its product revenue and services revenue represented 61% and 39% of its total revenue, respectively.

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