Ooma (OOMA) versus Viavi Solutions (VIAV) Critical Contrast

Ooma (NYSE: OOMA) and Viavi Solutions (NASDAQ:VIAV) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Insider and Institutional Ownership

72.3% of Ooma shares are owned by institutional investors. Comparatively, 92.4% of Viavi Solutions shares are owned by institutional investors. 48.2% of Ooma shares are owned by insiders. Comparatively, 0.6% of Viavi Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Ooma and Viavi Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ooma 1 2 2 0 2.20
Viavi Solutions 0 2 5 0 2.71

Ooma presently has a consensus target price of $12.67, indicating a potential upside of 14.63%. Viavi Solutions has a consensus target price of $12.50, indicating a potential upside of 42.05%. Given Viavi Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe Viavi Solutions is more favorable than Ooma.

Profitability

This table compares Ooma and Viavi Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ooma -11.65% -32.29% -17.21%
Viavi Solutions 10.57% 8.99% 3.44%

Risk & Volatility

Ooma has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Earnings and Valuation

This table compares Ooma and Viavi Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ooma $104.52 million 2.01 -$12.94 million ($0.72) -15.35
Viavi Solutions $811.40 million 2.47 $166.90 million $0.36 24.44

Viavi Solutions has higher revenue and earnings than Ooma. Ooma is trading at a lower price-to-earnings ratio than Viavi Solutions, indicating that it is currently the more affordable of the two stocks.

Summary

Viavi Solutions beats Ooma on 12 of the 14 factors compared between the two stocks.

About Ooma

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

About Viavi Solutions

Viavi Solutions Inc. (Viavi) is a provider of network test, monitoring and assurance solutions to communications service providers, enterprises and their ecosystems. The Company also offers thin film optical coatings, providing light management solutions to anti-counterfeiting, consumer and industrial, government and healthcare and other markets. The Company’s segments include Network Enablement (NE), Service Enablement (SE), and Optical Security and Performance Products (OSP). The NE segment provides testing solutions that access the network to perform build-out and maintenance tasks. The SE segment offers solutions, which are embedded systems that yield network, service and application performance data. The OSP segment provides optical security solutions. The OSP segment’s security offerings for the currency market include Optically Variable Pigment (OVP), Optically Variable Magnetic Pigment (OVMP) and banknote thread substrates.

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