Financial Survey: UTStarcom (UTSI) versus ARRIS International (ARRS)

ARRIS International (NASDAQ: ARRS) and UTStarcom (NASDAQ:UTSI) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for ARRIS International and UTStarcom, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARRIS International 0 3 6 0 2.67
UTStarcom 0 0 1 0 3.00

ARRIS International presently has a consensus price target of $33.56, indicating a potential upside of 28.96%. UTStarcom has a consensus price target of $5.00, indicating a potential downside of 17.08%. Given ARRIS International’s higher probable upside, analysts clearly believe ARRIS International is more favorable than UTStarcom.

Insider & Institutional Ownership

86.5% of ARRIS International shares are owned by institutional investors. Comparatively, 27.0% of UTStarcom shares are owned by institutional investors. 0.9% of ARRIS International shares are owned by insiders. Comparatively, 2.7% of UTStarcom shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares ARRIS International and UTStarcom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARRIS International 5.02% 11.25% 4.59%
UTStarcom N/A N/A N/A

Earnings & Valuation

This table compares ARRIS International and UTStarcom’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARRIS International $6.83 billion 0.71 $18.10 million $0.87 29.91
UTStarcom $80.18 million 2.67 $290,000.00 $0.01 603.00

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

Summary

ARRIS International beats UTStarcom on 9 of the 13 factors compared between the two stocks.

About ARRIS International

ARRIS International plc is a media entertainment and data communications solutions provider. The Company operates in two segments: Customer Premises Equipment (CPE), and Network & Cloud (N&C). The Company enables service providers, including cable, telephone, and digital broadcast satellite operators, and media programmers to deliver media, voice and Internet Protocol (IP) data services to their subscribers. It is engaged in offering set-tops, digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms, and associated data and voice CPE, which it also sells directly to consumers through retail channels. Its solutions are complemented by an array of services, including technical support, repair and refurbishment, and system design and integration. The CPE segment consists of CPE Products-Video and CPE Products-Broadband. The N&C segment consists of Infrastructure Products, Cloud Software and Global Services.

About UTStarcom

UTStarcom Holdings Corp. provides broadband products, solution and services. The Company delivers broadband transport and access (both wireless fidelity (Wi-Fi) and fixed line) products and solutions, optimized for mobile backhaul, metro aggregation, broadband access and Wi-Fi data offloading. Its segments include Equipment, which is focused on its equipment sales, including network infrastructure and application products, and Services, which is engaged in providing services and support of its equipment products and also the new operational support segment. The broadband product lines include family of packet transport network (PTN) products based on multi-protocol label switch transport profile (MPLS-TP) and carrier Ethernet (CE) technologies enhanced through in-house software-defined networking (SDN) platform to support the network evolution, and multi services access network (MSAN) platform. Wireless broadband access is represented by end-to-end Carrier Wi-Fi solution.

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