Critical Analysis: United Internet (OTCMKTS:UDIRF) versus Crexendo (NASDAQ:CXDO)

United Internet (OTCMKTS:UDIRF) and Crexendo (NASDAQ:CXDO) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, profitability, earnings, institutional ownership, analyst recommendations, valuation and dividends.

Risk & Volatility

United Internet has a beta of 0.14, indicating that its share price is 86% less volatile than the S&P 500. Comparatively, Crexendo has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares United Internet and Crexendo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Internet	$6.85 billion	0.77	$114.57 million	$0.74	36.94
Crexendo	$60.84 million	3.38	$1.68 million	$0.15	44.60

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for United Internet and Crexendo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Internet	1	0	0	0	1.00
Crexendo	0	1	5	0	2.83

Crexendo has a consensus target price of $9.08, indicating a potential upside of 35.77%. Given Crexendo’s stronger consensus rating and higher possible upside, analysts plainly believe Crexendo is more favorable than United Internet.

Institutional & Insider Ownership

9.5% of Crexendo shares are held by institutional investors. 47.2% of Crexendo shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares United Internet and Crexendo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Internet	1.90%	2.19%	1.00%
Crexendo	6.58%	13.09%	10.59%

Summary

Crexendo beats United Internet on 11 of the 14 factors compared between the two stocks.

About United Internet

United Internet AG, through its subsidiaries, operates as an Internet service provider worldwide. The company operates through Consumer Access, Business Access, Consumer Applications, and Business Applications segments. It offers landline-based broadband and mobile internet products, including home networks, online storage, telephony, and IPTV for private users; and telecommunication products ranging from fiber-optic direct connections to tailored ICT solutions, which include voice, data, and network solutions, as well as infrastructure services to national and international carriers and ISPs. The company also provides applications and services for home users, such as personal information management applications comprising email, to-do lists, appointments, and addresses; and online cloud storage, as well as domains and website solutions. In addition, it provides business applications for freelancers and small to medium enterprises, such as domains, websites, web hosting, servers, cloud solutions, e-shops, group work, online cloud storage, and office software. It offers its access products through the yourfone, smartmobile.de, 1&1, and 1&1 Versatel brands; and applications through GMX, mail.com, WEB.DE, home.pl, Arsys, STRATO, IONOS, Fasthosts, we22, InterNetX, united-domains, and World4You brand names. In addition, the company offers customers professional services in the fields of active domain management; performance-based advertising and sales services under the Sedo brand name; online advertising services under the United Internet Media brand name; and white-label website builder services under the we22 brand, as well as sells IT hardware. The company was incorporated in 1988 and is headquartered in Montabaur, Germany.

About Crexendo

Crexendo, Inc. provides cloud communication platform and services, video collaboration, and managed IT services for businesses in the United States and internationally. It operates through two segments, Cloud Telecommunications Services and Software Solutions. The Cloud Telecommunications segment provides telecommunications services that transmit calls using Internet protocol (IP) or cloud technology, which converts voice signals into digital data packets for transmission over the Internet or cloud; and broadband Internet services, as well as develops end user portals for account and license management, and billing and customer support. This segment is also involved in the sale and lease of cloud telecommunications equipment. In addition, it offers hardware, software, and unified communication solutions for businesses using IP or cloud technology over high-speed internet connection through various devices and user interfaces, such as desktop phones and/or mobile, and desktop applications under the Crexendo brand name. The Software Solutions segment provides a suite of unified communications, collaboration, video conferencing, and contact center solutions. This segment also offers SNAPsolution, an IP-based platform; SNAPaccel, a software-as-a-service based software; subscription maintenance and support services; and professional services, including consulting, technical support, resident engineer, design, and installation services. The company was formerly known as iMergent, Inc. and changed its name to Crexendo, Inc. in May 2011. Crexendo, Inc. was incorporated in 1995 and is based in Tempe, Arizona.