Ringcentral (NYSE: RNG) and RealPage (NASDAQ:RP) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Insider & Institutional Ownership

75.2% of Ringcentral shares are held by institutional investors. Comparatively, 70.5% of RealPage shares are held by institutional investors. 14.5% of Ringcentral shares are held by insiders. Comparatively, 33.2% of RealPage shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Ringcentral and RealPage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ringcentral -6.77% -19.59% -10.51%
RealPage 4.25% 10.26% 4.76%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Ringcentral and RealPage, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ringcentral 0 3 10 0 2.77
RealPage 1 1 4 0 2.50

Ringcentral currently has a consensus target price of $39.17, indicating a potential downside of 7.52%. RealPage has a consensus target price of $39.83, indicating a potential downside of 8.01%. Given Ringcentral’s stronger consensus rating and higher possible upside, research analysts clearly believe Ringcentral is more favorable than RealPage.

Risk & Volatility

Ringcentral has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, RealPage has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares Ringcentral and RealPage’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ringcentral $432.57 million 7.50 -$12.96 million ($0.39) -108.59
RealPage $611.25 million 5.60 $91.37 million $0.32 135.31

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

Summary

RealPage beats Ringcentral on 8 of the 13 factors compared between the two stocks.

About Ringcentral

RingCentral, Inc. is a provider of software-as-a-service (SaaS) solutions for businesses to support modern communications. The Company’s cloud-based business communications solutions provide a single user identity across multiple locations and devices, including smartphones, tablets, personal computers (PCs) and desk phones, and allow for communication across multiple channels, including high definition (HD) voice, video, short messaging service (SMS), messaging and collaboration, conferencing, online meetings, and fax. The Company’s products include RingCentral Office, RingCentral Professional, RingCentral Fax, RingCentral Contact Center and RingCentral Glip. RingCentral Office is a multi-user, enterprise-grade communications solution. RingCentral Professional is an inbound call routing subscription with additional text and fax capabilities targeting smaller deployments, and RingCentral Fax is an Internet fax subscription that permits sending and receiving faxes over the Internet.

About RealPage

RealPage, Inc. is a provider of technology to the real estate industry, helping owners, managers and investors. The Company’s property management solutions are referred to as Enterprise Resource Planning systems. Its on demand platform provides a single point of access and a repository of real-time lease transaction data, including prospect, renter and property data. Its platform consists of four primary categories of solutions: Property Management, Lease Management, Resident Services and Asset Optimization. These solutions provide complementary asset performance and investment decision support; risk mitigation, billing and utility management; resident engagement, spend management, operations and facilities management, and lead generation and lease management capabilities that collectively enable its clients to manage all the stages of the renter life cycle. In addition, its open architecture allows third-party applications to access its solutions using its RealPage Exchange platform.

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