RingCentral (NYSE: RNG) and Inovalon (NASDAQ:INOV) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.
Earnings & Valuation
Get RingCentral alerts:This table compares RingCentral and Inovalon’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RingCentral | $501.53 million | 11.64 | -$26.14 million | ($0.35) | -211.86 |
| Inovalon | $449.36 million | 3.49 | $34.81 million | $0.23 | 44.78 |
Inovalon has lower revenue, but higher earnings than RingCentral. RingCentral is trading at a lower price-to-earnings ratio than Inovalon, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares RingCentral and Inovalon’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RingCentral | -3.99% | -9.90% | -4.62% |
| Inovalon | 3.20% | 2.50% | 1.62% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for RingCentral and Inovalon, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RingCentral | 0 | 3 | 9 | 0 | 2.75 |
| Inovalon | 1 | 3 | 0 | 0 | 1.75 |
RingCentral presently has a consensus target price of $64.83, indicating a potential downside of 12.56%. Inovalon has a consensus target price of $12.00, indicating a potential upside of 16.50%. Given Inovalon’s higher possible upside, analysts plainly believe Inovalon is more favorable than RingCentral.
Institutional & Insider Ownership
77.6% of RingCentral shares are held by institutional investors. Comparatively, 29.5% of Inovalon shares are held by institutional investors. 12.0% of RingCentral shares are held by company insiders. Comparatively, 50.9% of Inovalon shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
RingCentral has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Inovalon has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
Summary
Inovalon beats RingCentral on 9 of the 14 factors compared between the two stocks.
About RingCentral
RingCentral, Inc. provides software-as-a-service solutions for business communications and collaboration primarily in the United States. The company's products include RingCentral Office, a multi-tenant, multi-location, and enterprise-grade communications and collaboration solution that enables employees to communicate through voice, text, team messaging and collaboration, and HD video and Web conferencing through smartphones, tablets, PCs, and desk phones for businesses, which require a communications solution; RingCentral Professional, an inbound call routing subscription with additional text and fax capabilities primarily for smaller businesses; and RingCentral Fax solution that offers Internet fax capabilities, which allow businesses to send and receive fax documents without the need for a fax machine. Its products also comprise RingCentral Contact Center that provides a cloud based contact center solution, which delivers omni-channel capabilities; and RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office. RingCentral, Inc. serves a range of industries, including financial services, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. The company sells its products through a network of direct sales representatives, as well as sales agents and channel partners. RingCentral, Inc. was founded in 1999 and is headquartered in Belmont, California.
About Inovalon
Inovalon Holdings, Inc., a technology company, provides cloud-based platforms empowering a data-driven transformation from volume-based to value-based models in the healthcare industry. The company's platform enables the assessment and enhancement of clinical and quality outcomes and financial performance. It serves health plans and provider organizations, as well as pharmaceutical, medical device, and diagnostics companies. The company provides technology that supports approximately 500 healthcare organizations. Its platforms are informed by data pertaining to approximately 932,000 physicians; 455,000 clinical facilities; and approximately 240 million individuals and 37 billion medical events. Inovalon Holdings, Inc. was founded in 1998 and is headquartered in Bowie, Maryland.
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