VirnetX (NYSE:VHC) vs. InterDigital (NASDAQ:IDCC) Critical Contrast

VirnetX (NYSE:VHC) and InterDigital (NASDAQ:IDCC) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Valuation & Earnings

This table compares VirnetX and InterDigital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VirnetX $90,000.00 3,884.56 -$19.18 million N/A N/A
InterDigital $318.92 million 7.07 $20.93 million $0.66 110.83

InterDigital has higher revenue and earnings than VirnetX.

Profitability

This table compares VirnetX and InterDigital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VirnetX 93.64% 145.01% 113.63%
InterDigital 16.17% 5.25% 2.65%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for VirnetX and InterDigital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VirnetX 0 0 0 0 N/A
InterDigital 0 1 4 0 2.80

InterDigital has a consensus price target of $101.00, indicating a potential upside of 38.07%. Given InterDigital’s higher possible upside, analysts plainly believe InterDigital is more favorable than VirnetX.

Insider & Institutional Ownership

30.8% of VirnetX shares are owned by institutional investors. Comparatively, 77.7% of InterDigital shares are owned by institutional investors. 13.1% of VirnetX shares are owned by company insiders. Comparatively, 1.7% of InterDigital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

VirnetX has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, InterDigital has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Summary

InterDigital beats VirnetX on 6 of the 11 factors compared between the two stocks.

VirnetX Company Profile

VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet, as well as enable organizations and individuals to establish communities of secure, registered users, and transmit information between various devices, networks, and operating systems. It also offers a portfolio of licenses and services, such as VirnetX technology licensing; GABRIEL Connection Technology software development kit, including object libraries, sample code, testing and quality assurance tools, and supporting documentation required for customers to implement the company's technology; secure domain name registrar service; registrar server software; connection server software; relay server software; and secure domain name master registry and connection, and technical support services. In addition, the company provides GABRIEL Collaboration Suite that enables seamless and secure cross-platform communications between users' devices. The company serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, smart phones, tablets, e-Readers, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. VirnetX Holding Corporation was incorporated in 2005 and is based in Zephyr Cove, Nevada.

InterDigital Company Profile

InterDigital, Inc. designs and develops technologies that enable and enhance wireless communications in the United States and internationally. It provides technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G NR, beyond 5G (B5G), extended reality over wireless, and cellular Internet of Things (IoT) areas, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. It also provides video coding and transmission technologies; and engages in the research and development of artificial intelligence. The company's patented technologies are used in various products that include cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, which comprise base stations; components, dongles, and modules for wireless devices; and IoT devices and software platforms. As of December 31, 2020, it had a portfolio of approximately 28,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.

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