Head to Head Analysis: Sierra Wireless (SWIR) and ARRIS Group (ARRS)

Sierra Wireless (NASDAQ: SWIR) and ARRIS Group (NASDAQ:ARRS) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Sierra Wireless and ARRIS Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sierra Wireless $692.08 million 0.93 $4.13 million $0.58 30.95
ARRIS Group $6.61 billion 0.75 $92.02 million $2.43 10.94

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

Insider and Institutional Ownership

27.2% of Sierra Wireless shares are held by institutional investors. Comparatively, 88.8% of ARRIS Group shares are held by institutional investors. 2.0% of Sierra Wireless shares are held by company insiders. Comparatively, 0.9% of ARRIS Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Sierra Wireless and ARRIS Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sierra Wireless 0 7 3 0 2.30
ARRIS Group 0 3 4 0 2.57

Sierra Wireless presently has a consensus target price of $24.30, suggesting a potential upside of 35.38%. ARRIS Group has a consensus target price of $33.43, suggesting a potential upside of 25.77%. Given Sierra Wireless’ higher probable upside, research analysts plainly believe Sierra Wireless is more favorable than ARRIS Group.

Profitability

This table compares Sierra Wireless and ARRIS Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sierra Wireless -0.56% 3.23% 2.15%
ARRIS Group 1.77% 16.38% 6.90%

Risk & Volatility

Sierra Wireless has a beta of 2.76, suggesting that its stock price is 176% more volatile than the S&P 500. Comparatively, ARRIS Group has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Summary

ARRIS Group beats Sierra Wireless on 9 of the 14 factors compared between the two stocks.

About Sierra Wireless

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.

About ARRIS Group

ARRIS International plc, together with its subsidiaries, provides entertainment, communications, and networking technology and solutions worldwide. It operates through three segments, Customer Premises Equipment, Network & Cloud, and Enterprise Networks. The Customer Premises Equipment segment offers digital subscriber lines and cable modems, broadband gateways, set-top boxes, and video gateways. The Network & Cloud segment provides cable modem termination system, converged cable access platform, passive optical network, service provider and programmer equipment, Ad insertion technologies, and equipment in the ground or on transmission poles, as well as equipment used to initiate the distribution of content-carrying signals. This segment also offers technical support and professional services; software products that enable providers to deliver content and advertising services; network management products that collect information from the broadband network; and customer experience management solutions, as well as network surveillance and issue correlation software and services. The Enterprise Networks segment provides wired Ethernet switches; and indoor, outdoor, and special-purpose Wi-Fi access points, as well as accessories, such as antennas. This segment also offers SmartCell Insight, a big data Wi-Fi analytics and reporting platform; ZonePlanner, a Wi-Fi planning and modeling software; Smart Positioning Technology, a cloud-based smart Wi-Fi location-based services platform; Cloudpath Wi-Fi device; mobile apps for controllers, cloud Wi-Fi, location, and performance testing; Ruckus Cloud Wi-Fi, a wireless local area network management-as-a-service; and ZoneDirector, a smart Wi-Fi controller. The company was formerly known as ARRIS Group, Inc. and changed its name to ARRIS International plc in January 2016. ARRIS International plc was founded in 1969 and is headquartered in Suwanee, Georgia.

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