Head-To-Head Analysis: RingCentral (RNG) and ChannelAdvisor (ECOM)

RingCentral (NYSE: RNG) and ChannelAdvisor (NYSE:ECOM) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for RingCentral and ChannelAdvisor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RingCentral 0 3 11 0 2.79
ChannelAdvisor 0 5 3 0 2.38

RingCentral presently has a consensus price target of $44.62, indicating a potential downside of 17.61%. ChannelAdvisor has a consensus price target of $14.13, indicating a potential upside of 54.37%. Given ChannelAdvisor’s higher possible upside, analysts plainly believe ChannelAdvisor is more favorable than RingCentral.

Insider and Institutional Ownership

76.3% of RingCentral shares are owned by institutional investors. Comparatively, 81.7% of ChannelAdvisor shares are owned by institutional investors. 14.5% of RingCentral shares are owned by company insiders. Comparatively, 11.3% of ChannelAdvisor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RingCentral $379.72 million 11.03 -$29.30 million ($0.36) -150.42
ChannelAdvisor $113.20 million 2.15 -$8.00 million ($0.40) -22.87

ChannelAdvisor has lower revenue, but higher earnings than RingCentral. RingCentral is trading at a lower price-to-earnings ratio than ChannelAdvisor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares RingCentral and ChannelAdvisor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RingCentral -5.80% -17.97% -9.86%
ChannelAdvisor -8.54% -9.48% -5.75%

Volatility & Risk

RingCentral has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, ChannelAdvisor has a beta of 0.1, indicating that its share price is 90% less volatile than the S&P 500.

Summary

RingCentral beats ChannelAdvisor on 8 of the 14 factors compared between the two stocks.

RingCentral Company Profile

RingCentral, Inc. is a provider of software-as-a-service (SaaS) solutions for businesses to support modern communications. The Company’s cloud-based business communications solutions provide a single user identity across multiple locations and devices, including smartphones, tablets, personal computers (PCs) and desk phones, and allow for communication across multiple channels, including high definition (HD) voice, video, short messaging service (SMS), messaging and collaboration, conferencing, online meetings, and fax. The Company’s products include RingCentral Office, RingCentral Professional, RingCentral Fax, RingCentral Contact Center and RingCentral Glip. RingCentral Office is a multi-user, enterprise-grade communications solution. RingCentral Professional is an inbound call routing subscription with additional text and fax capabilities targeting smaller deployments, and RingCentral Fax is an Internet fax subscription that permits sending and receiving faxes over the Internet.

ChannelAdvisor Company Profile

Channeladvisor Corporation is a provider of Software as a service (SaaS) solutions. The Company’s SaaS solutions enable retailer and branded manufacturer customers to integrate, manage and optimize their merchandise sales via hundreds of online channels. The Company’s platform enable its customers to connect with new and existing sources of demand for their products, including e-commerce marketplaces, such as Amazon, eBay, Jet.com, Newegg, Sears and Walmart, search engines and comparison shopping Websites, such as Google, Microsoft’s Bing and Nextag, and social channels, such as Facebook, Instagram and Pinterest. Its suite of solutions provides customers with a single, integrated user interface to manage their product listings, inventory availability, pricing optimization, search terms, data analytics and other functions. It also offers solutions that allow manufacturers to send their Web visitors or digital marketing audiences directly to authorized resellers.

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