Head-To-Head Review: RealNetworks (RNWK) versus Citrix Systems (CTXS)

RealNetworks (NASDAQ: RNWK) and Citrix Systems (NASDAQ:CTXS) 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, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

51.7% of RealNetworks shares are held by institutional investors. Comparatively, 93.3% of Citrix Systems shares are held by institutional investors. 37.9% of RealNetworks shares are held by company insiders. Comparatively, 0.4% of Citrix Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares RealNetworks and Citrix Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
RealNetworks $120.47 million 1.45 -$36.55 million ($0.73) -6.42
Citrix Systems $3.42 billion 3.75 $536.11 million $2.95 28.81

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

Profitability

This table compares RealNetworks and Citrix Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RealNetworks -21.67% -32.02% -21.45%
Citrix Systems 15.67% 31.32% 11.35%

Analyst Recommendations

This is a summary of current recommendations and price targets for RealNetworks and Citrix Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealNetworks 0 0 1 0 3.00
Citrix Systems 1 6 8 0 2.47

RealNetworks currently has a consensus target price of $6.50, suggesting a potential upside of 38.59%. Citrix Systems has a consensus target price of $89.50, suggesting a potential upside of 5.31%. Given RealNetworks’ stronger consensus rating and higher possible upside, equities analysts plainly believe RealNetworks is more favorable than Citrix Systems.

Risk & Volatility

RealNetworks has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Citrix Systems has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Summary

Citrix Systems beats RealNetworks on 10 of the 13 factors compared between the two stocks.

RealNetworks Company Profile

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

Citrix Systems Company Profile

Citrix Systems, Inc. offers Enterprise and Service Provider products, which include Workspace Services solutions and Delivery Networking products. The Company’s Enterprise and Service Provider products include Cloud Services solutions, and related license updates and maintenance, support and professional services. The Company’s NetScaler nCore Technology is an architecture that enables execution of multiple packet engines in parallel. The Company’s workspace services include Application Virtualization and virtual desktop infrastructure (VDI), Enterprise Mobility Management and Citrix Workspace Suite. The Company’s NetScaler ADC is a software-defined application delivery controller (ADC) and load balancer. The Company’s Cloud Services include ShareFile and Citrix Cloud. It provides various ways for customers to receive upgrades, support and maintenance for products, which include Software Maintenance, Subscription Advantage, Technical Support Services and Hardware Maintenance.

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