Reviewing Ribbon Communications (NASDAQ:RBBN) and A10 Networks (NYSE:ATEN)

Ribbon Communications (NASDAQ:RBBN) and A10 Networks (NYSE:ATEN) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, risk, valuation, dividends, earnings and analyst recommendations.

Earnings & Valuation

This table compares Ribbon Communications and A10 Networks”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ribbon Communications	$833.88 million	0.82	-$54.24 million	($0.25)	-15.48
A10 Networks	$276.45 million	4.48	$50.14 million	$0.68	25.25

A10 Networks has lower revenue, but higher earnings than Ribbon Communications. Ribbon Communications is trading at a lower price-to-earnings ratio than A10 Networks, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ribbon Communications and A10 Networks, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ribbon Communications	0	0	4	0	3.00
A10 Networks	0	2	4	0	2.67

Ribbon Communications presently has a consensus price target of $6.00, indicating a potential upside of 55.04%. A10 Networks has a consensus price target of $22.00, indicating a potential upside of 28.13%. Given Ribbon Communications’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Ribbon Communications is more favorable than A10 Networks.

Institutional & Insider Ownership

70.9% of Ribbon Communications shares are owned by institutional investors. Comparatively, 98.6% of A10 Networks shares are owned by institutional investors. 1.7% of Ribbon Communications shares are owned by company insiders. Comparatively, 1.2% of A10 Networks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Ribbon Communications has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, A10 Networks has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Profitability

This table compares Ribbon Communications and A10 Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ribbon Communications	-5.14%	7.08%	2.41%
A10 Networks	18.45%	25.46%	10.52%

Summary

A10 Networks beats Ribbon Communications on 9 of the 13 factors compared between the two stocks.

About Ribbon Communications

Ribbon Communications Inc. provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It operates through two segments, Cloud and Edge, and IP Optical Networks. The Cloud and Edge segment provides software and hardware products, solutions, and services for voice over internet protocol communications, voice over long-term evolution, and voice over 5G communications, and unified communications and collaboration. It also offers session border controllers; and network transformation products, such as signaling products, call controllers, media gateways, and application servers. This segment serves private, public, or hybrid cloud infrastructures, as well as data centers, enterprise premises, and service provider networks. The IP Optical Networks segment provides hardware and software products and solutions for IP networking, switching, routing, and optical transport for technologies, such as 5G, distributed cloud computing, and corresponding applications. It also offers multiple solutions, including 5G-native solutions for mobile-backhaul, metro and edge aggregation, core networking, data center interconnect, multi-service access, and transport solutions for wholesale carriers. This segment serves utilities, government, defense, finance, transportation, and education and research industries, as well as service providers and enterprises. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Plano, Texas.

About A10 Networks

A10 Networks, Inc. provides networking solutions in the Americas, Japan, rest of Asia Pacific, Europe, the Middle East, and Africa. The company offers Thunder Application Delivery Controller that provides advanced server load balancing; Thunder Carrier Grade Networking, which provides standards-compliant address and protocol translation services between varying types of internet protocol addresses; Thunder Secure Sockets Layer (SSL) Insight that decrypts SSL-encrypted traffic and forwards it to a third-party security device for deep packet inspection; and Thunder Convergent Firewall, which addresses multiple critical security capabilities in one package. It also provides intelligent management and automation tool comprising harmony controller that provides intelligent management, automation, and analytics for secure application delivery. In addition, the company offers A10 Defend Threat Control, a standalone SaaS platform; A10 Defend Orchestrator provides a centralized point of control for seamless distributed denial of service (DDoS) defense management and execution; A10 Defend Detector, a Netflow, Sflow, IPFIX-based DDoS detector used to easily manage the scale and heterogenous nature of SP networks; and A10 Defend Mitigator, a precision, automated, scalable, and intelligent DDoS mitigation solution. It delivers its solutions in optimized hardware appliances, bare metal software, containerized software, virtual appliances, and cloud-native software forms. The company serves cloud providers; cloud, telecommunications, and multiple system and cable service providers; government organizations; and enterprises in the telecommunications, technology, industrial, government, retail, financial, gaming, and education industries. It markets its products through sales organizations; and distribution channel partners, such as distributors, value added resellers, and system integrators. A10 Networks, Inc. was incorporated in 2004 and is headquartered in San Jose, California.