Renren (RENN) vs. Ooma (OOMA) Financial Review

Renren (NYSE:RENN) and Ooma (NYSE:OOMA) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for Renren and Ooma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Renren 0 0 0 0 N/A
Ooma 0 2 3 0 2.60

Ooma has a consensus target price of $15.50, suggesting a potential upside of 6.46%. Given Ooma’s higher possible upside, analysts plainly believe Ooma is more favorable than Renren.

Volatility & Risk

Renren has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Ooma has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Insider and Institutional Ownership

2.8% of Renren shares are held by institutional investors. Comparatively, 74.7% of Ooma shares are held by institutional investors. 42.4% of Renren shares are held by insiders. Comparatively, 10.5% of Ooma shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Renren and Ooma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Renren 10.94% -19.14% -11.34%
Ooma -11.23% -36.56% -17.31%

Earnings and Valuation

This table compares Renren and Ooma’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Renren $202.10 million 0.53 -$110.42 million ($1.61) -0.97
Ooma $114.49 million 2.56 -$13.12 million ($0.69) -21.10

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

Summary

Ooma beats Renren on 7 of the 13 factors compared between the two stocks.

About Renren

Renren Inc. operates a social networking Internet platform in the People's Republic of China. It operates through two segments, Renren and Auto Group. The company operates Renren.com and Renren Mobile App that enable users to communicate and stay connected with friends, classmates, family members, and co-workers; and woxiu.com, a PC-based social video platform for users to stream their performances live to viewers. The company also sells used automobiles and related products; arranges financing options for customers through its financial services partners; provides credit financing for used automobile dealerships; and sells new cars, as well as provides value-added services, such as warranties, insurance, and after-sale products and services. It offers vehicles at its in-store showrooms; and through Kaixin Auto app, as well as through other online vertical channels, such as Autohome and 58.com. In addition, the company develops Chime, a software as a solution platform that offers lead generation and customer relationship management solutions for real estate professionals; and provides customizable lead capture landing pages that offer multiple home value estimates in the United States. Further, it provides online and mobile services for the trucking industry in the United States. The company was formerly known as Oak Pacific Interactive and changed its name to Renren Inc. in December 2010. Renren Inc. was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

About Ooma

Ooma, Inc. provides communications solutions and other connected services to small business, home, and mobile users in the United States and Canadian markets. The company's Ooma Office, a multi-user communications system comprise an on-premise appliance and Ooma Linx end-point device that wirelessly connects regular desktop telephones and fax machines to the user's high-speed Internet connection; and Ooma Office Mobile HD app, which allows users to make, receive, and transfer phone calls. Its Ooma Telo, a home communications solution includes Ooma Premier Service, a suite of advanced calling features that have been designed to enhance the capabilities of Ooma Telo on a monthly or annual subscription basis; and Ooma Mobile HD app, which allows users to make and receive phone calls and access Ooma features and settings with iOS or Android device over a Wi-Fi or cellular data connection. In addition, the company offers Ooma Telo Air, a wireless device that connects to the Internet using the home's Wi-Fi network and can be paired with mobile phones to answer incoming mobile calls from phone in the home; Ooma handset, a Cordless handset; Wireless + bluetooth adapter, which allows users to install the Ooma Telo device anywhere in the home within range of their wireless network; and Safety phone, a wireless hands-free speakerphone that can be worn as a pendant. Further, it provides Ooma Home, a do-it-yourself home security solution; and Talkatone, a mobile app. The company offers its products through direct sales, retailers, and online, as well as through distributors and reseller partnership channels. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.

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