Critical Contrast: Vonage (VG) versus Its Rivals

Vonage (NYSE: VG) is one of 73 public companies in the “Telephone communication, except radio” industry, but how does it weigh in compared to its peers? We will compare Vonage to related businesses based on the strength of its profitability, valuation, institutional ownership, earnings, dividends, risk and analyst recommendations.

Risk & Volatility

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Vonage has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500. Comparatively, Vonage’s peers have a beta of 0.59, meaning that their average stock price is 41% less volatile than the S&P 500.

Earnings & Valuation

This table compares Vonage and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Vonage $1.00 billion -$33.93 million 38.89
Vonage Competitors $17.40 billion $2.02 billion 17.66

Vonage’s peers have higher revenue and earnings than Vonage. Vonage is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Vonage and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vonage -3.39% 14.13% 7.36%
Vonage Competitors -12.56% -11.21% -0.99%

Institutional and Insider Ownership

86.3% of Vonage shares are held by institutional investors. Comparatively, 46.9% of shares of all “Telephone communication, except radio” companies are held by institutional investors. 14.1% of Vonage shares are held by company insiders. Comparatively, 7.3% of shares of all “Telephone communication, except radio” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Vonage and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vonage 0 2 8 0 2.80
Vonage Competitors 609 1860 1943 98 2.34

Vonage presently has a consensus price target of $10.34, indicating a potential downside of 5.07%. As a group, “Telephone communication, except radio” companies have a potential upside of 67.88%. Given Vonage’s peers higher possible upside, analysts plainly believe Vonage has less favorable growth aspects than its peers.

Summary

Vonage beats its peers on 8 of the 13 factors compared.

About Vonage

Vonage Holdings Corp. provides communications services connecting people through cloud-connected devices worldwide. It offers various business services, including basic dial tone, call queue, conferencing, call groups, mobile functionality, CRM integration, and detailed analytics, as well as Vonage Business Cloud and Vonage Enterprise services. The company also provides home telephone services through various service plans with basic features, such as voicemail, call waiting, call forwarding, simulring, visual voicemail, and extensions, as well as area code selection, virtual phone number, and Web-enabled voicemail. Its primary home telephone offerings include Vonage World plan that offers unlimited domestic calling; calling to landline phones in approximately 60 countries; and calling to mobile phones in various countries, as well as Vonage North America plan for unlimited calling across the United States, Canada, Mexico, and Puerto Rico. In addition, the company provides Vonage-enabled devices, which allow customers to use the Internet connection for their computer and telephones at the same time; and high-speed broadband Internet service that allows calls over the Internet either from a telephone through a Vonage-enabled device, or through soft phone software, or mobile client applications. It sells its products through its sales agents, Websites, toll free numbers, and retailers for consumers and businesses in the United States, the United Kingdom, and Canada. As of December 31, 2017, it had approximately 2.2 million consumer subscriber lines and business seats. The company was incorporated in 2000 and is headquartered in Holmdel, New Jersey.

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