Contrasting Sierra Wireless (SWIR) & Ubiquiti Networks (NASDAQ:UBNT)

Sierra Wireless (NASDAQ: SWIR) and Ubiquiti Networks (NASDAQ:UBNT) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

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25.7% of Sierra Wireless shares are held by institutional investors. Comparatively, 31.1% of Ubiquiti Networks shares are held by institutional investors. 2.0% of Sierra Wireless shares are held by insiders. Comparatively, 72.8% of Ubiquiti Networks shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sierra Wireless and Ubiquiti Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sierra Wireless 0.60% 4.82% 3.19%
Ubiquiti Networks 15.73% 47.42% 25.83%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Sierra Wireless and Ubiquiti Networks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Wireless 0 8 3 0 2.27
Ubiquiti Networks 1 3 0 0 1.75

Sierra Wireless presently has a consensus price target of $24.30, suggesting a potential upside of 43.36%. Ubiquiti Networks has a consensus price target of $57.33, suggesting a potential downside of 22.53%. Given Sierra Wireless’ stronger consensus rating and higher possible upside, analysts plainly believe Sierra Wireless is more favorable than Ubiquiti Networks.

Valuation & Earnings

This table compares Sierra Wireless and Ubiquiti Networks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sierra Wireless $692.08 million 0.88 $4.13 million $0.58 29.22
Ubiquiti Networks $865.27 million 6.65 $257.50 million $3.09 23.95

Ubiquiti Networks has higher revenue and earnings than Sierra Wireless. Ubiquiti Networks is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Sierra Wireless has a beta of 2.76, meaning that its stock price is 176% more volatile than the S&P 500. Comparatively, Ubiquiti Networks has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Summary

Ubiquiti Networks beats Sierra Wireless on 9 of the 14 factors compared between the two stocks.

Sierra Wireless Company Profile

Sierra Wireless, Inc., together with its subsidiaries, engages in building the Internet of Things (IoT) with intelligent wireless solutions in North America, Europe, and the Asia Pacific. It operates in three segments: Original Equipment Manufacturer (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment offers embedded cellular modules, short range wireless modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; and Legato, an open source, Linux-based application framework. This segment provides its products and solutions to a range of industries, including automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, and other industries. It also offers professional services to OEM customers during their product development and launch process. The Enterprise Solutions segment provides a range of second, third, and fourth generation LTE intelligent cellular routers and gateways, as well as security and device management solutions, and professional services to public safety, transportation field service, energy, industrial, retail, and financial enterprises. The Cloud and Connectivity Services segment provides secure and scalable cloud based platform for deploying and managing IoT subscriptions, devices, data, and applications; connectivity services, which include smart SIM and core network platforms; and managed broadband cellular services. Sierra Wireless, Inc. sells its products directly, as well as through various indirect channels, such as OEMs, distributors, value added resellers, and hardware vendors, as well as SIM vendors and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.

Ubiquiti Networks Company Profile

Ubiquiti Networks, Inc. develops networking technology for service providers, enterprises, and consumers worldwide. The company's service provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems, and routing; and enterprise product platforms provide wireless LAN infrastructure, video surveillance products, switching and routing solutions, security gateways, and other complimentary WLAN products. Its products and solutions include radios, antennas, software, communications protocols, and management tools to deliver carrier and enterprise class wireless broadband access and other services in the unlicensed RF spectrum. The company also provides technology platforms, such as airMAX platform, which includes proprietary protocols that contain technologies for minimizing signal noise; EdgeMAX, a disruptive software and system routing platform; airFiber, a point-to-point radio system; and UFiber platform to build fiber Internet networks. In addition, it offers UniFi Enterprise Wi-Fi System that includes Wi-Fi certified hardware with a software based management controller; UniFi Video IP cameras for data transmission and power-over-Ethernet; UniFi Switches that deliver performance, switching, and PoE+ support for enterprise networks; and UniFi Security Gateway that extends the UniFi enterprise solutions to provide routing and network security, as well as develops AmpliFi platform, a Wi-Fi system solution for connected homes. Further, the company provides embedded radio products; and mounting brackets, cables, and power over Ethernet adapters. The company was formerly known as Pera Networks, Inc. and changed its name to Ubiquiti Networks, Inc. in 2005. Ubiquiti Networks, Inc. was incorporated in 2003 and is headquartered in New York, New York.

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