Financial Comparison: Ringcentral (RNG) & NetSuite (N)

Ringcentral (NYSE: RNG) and NetSuite (NYSE:N) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Ringcentral has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, NetSuite has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Institutional and Insider Ownership

75.0% of Ringcentral shares are owned by institutional investors. Comparatively, 54.5% of NetSuite shares are owned by institutional investors. 14.5% of Ringcentral shares are owned by company insiders. Comparatively, 4.6% of NetSuite shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for Ringcentral and NetSuite, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ringcentral 0 2 11 0 2.85
NetSuite 1 2 0 0 1.67

Ringcentral presently has a consensus price target of $42.25, indicating a potential upside of 1.68%. NetSuite has a consensus price target of $91.00, indicating a potential upside of 0.73%. Given Ringcentral’s stronger consensus rating and higher possible upside, research analysts plainly believe Ringcentral is more favorable than NetSuite.

Profitability

This table compares Ringcentral and NetSuite’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ringcentral -6.77% -19.59% -10.51%
NetSuite -14.00% -42.52% -11.31%

Earnings and Valuation

This table compares Ringcentral and NetSuite’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ringcentral $432.57 million 7.36 -$12.96 million ($0.39) -106.54
NetSuite N/A N/A N/A ($1.67) -54.10

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

Summary

Ringcentral beats NetSuite on 10 of the 11 factors compared between the two stocks.

About Ringcentral

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.

About NetSuite

NetSuite Inc. (NetSuite) is a provider of cloud-based financials, enterprise resource planning and omnichannel commerce software suites. The Company offers a suite of applications, including financial management, customer relationship management, e-commerce and retail management, commerce marketing automation, professional services automation and human capital management that enable companies to manage business operations in an integrated suite. The Company also offers customer support and professional services related to the support and implementation of its suite of applications. The Company delivers its applications over the Internet as a subscription service using the software-as-a-service model. The Company’s offerings include NetSuite, NetSuite OneWorld, NetSuite CRM+, NetSuite OpenAir PSA, SuiteCommerce, Bronto Marketing Platform, NetSuite InStore POS, LightCMS, Add-On Modules, NetSuite Industry Editions and SuiteCloud Platform.

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