Head-To-Head Survey: Arista Networks (ANET) vs. Ooma (OOMA)

Arista Networks (NYSE: ANET) and Ooma (NYSE:OOMA) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Arista Networks 25.10% 24.76% 15.89%
Ooma -11.48% -30.96% -16.79%

Risk & Volatility

Arista Networks has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Ooma has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Institutional & Insider Ownership

59.7% of Arista Networks shares are owned by institutional investors. Comparatively, 75.6% of Ooma shares are owned by institutional investors. 28.1% of Arista Networks shares are owned by insiders. Comparatively, 11.4% of Ooma shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Arista Networks and Ooma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arista Networks 0 14 17 0 2.55
Ooma 1 2 2 0 2.20

Arista Networks currently has a consensus price target of $189.85, indicating a potential downside of 21.72%. Ooma has a consensus price target of $11.92, indicating a potential upside of 21.60%. Given Ooma’s higher probable upside, analysts clearly believe Ooma is more favorable than Arista Networks.

Valuation & Earnings

This table compares Arista Networks and Ooma’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Arista Networks $1.13 billion 15.70 $184.18 million $4.82 50.32
Ooma $104.52 million 1.71 -$12.94 million ($0.71) -13.80

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

Summary

Arista Networks beats Ooma on 10 of the 13 factors compared between the two stocks.

Arista Networks Company Profile

Arista Networks, Inc. is a supplier of cloud networking solutions that use software innovations to address the needs of Internet companies, cloud service providers and data centers for enterprise support. It develops, markets and sells cloud networking solutions, which consist of its Gigabit Ethernet switches and related software. The Company’s cloud networking solutions consist of its Extensible Operating System (EOS), a set of network applications and its Ethernet switching and routing platforms. The programmability of EOS has allowed it to create a set of software applications that address the requirements of cloud networking, including workflow automation, network visibility and analytics, and has also allowed it to integrate with a range of third-party applications for virtualization, management, automation, orchestration and network services. EOS supports cloud and virtualization solutions, including VMware NSX, Microsoft System Center and other cloud management frameworks.

Ooma Company Profile

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

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