Critical Comparison: UTStarcom (NASDAQ:UTSI) vs. Ooma (NYSE:OOMA)

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

Earnings & Valuation

This table compares UTStarcom and Ooma”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UTStarcom	$10.88 million	1.91	-$4.37 million	N/A	N/A
Ooma	$261.62 million	1.37	-$6.90 million	($0.07)	-185.14

UTStarcom has higher earnings, but lower revenue than Ooma.

Insider & Institutional Ownership

1.8% of UTStarcom shares are owned by institutional investors. Comparatively, 80.4% of Ooma shares are owned by institutional investors. 2.7% of UTStarcom shares are owned by company insiders. Comparatively, 9.9% of Ooma 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.

Risk & Volatility

UTStarcom has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Ooma has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UTStarcom	N/A	N/A	N/A
Ooma	-0.58%	6.57%	3.77%

Analyst Recommendations

This is a breakdown of recent recommendations for UTStarcom and Ooma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UTStarcom	0	0	0	0	0.00
Ooma	0	1	4	0	2.80

Ooma has a consensus target price of $17.63, indicating a potential upside of 36.00%. Given Ooma’s stronger consensus rating and higher probable upside, analysts clearly believe Ooma is more favorable than UTStarcom.

Summary

Ooma beats UTStarcom on 9 of the 12 factors compared between the two stocks.

About UTStarcom

UTStarcom Holdings Corp. operates as a telecom infrastructure provider to develop technology for bandwidth from cloud-based services, mobile, streaming, and other applications in China, India, Japan, and internationally. Its products include converged packet transport, disaggregated router platform, packet transport network, packet aggregation network, multi-services access network, fiber to the X, carrier Wi-Fi solutions, and software defined network controller products. The company also offers packet optical and network synchronization products. It serves telecommunications operators and equipment distributors. The company was founded in 1991 and is based in Hangzhou, the People's Republic of China.

About Ooma

Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.