Critical Analysis: King Digital Entertainment PLC (KING) versus Radware (RDWR)
King Digital Entertainment PLC (NYSE: KING) and Radware (NASDAQ:RDWR) are both application software companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Institutional and Insider Ownership
59.8% of Radware shares are held by institutional investors. 21.6% of Radware shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares King Digital Entertainment PLC and Radware’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|King Digital Entertainment PLC||N/A||N/A||N/A||$1.75||10.29|
|Radware||$196.59 million||4.30||-$8.65 million||($0.27)||-71.96|
King Digital Entertainment PLC has higher revenue, but lower earnings than Radware. Radware is trading at a lower price-to-earnings ratio than King Digital Entertainment PLC, indicating that it is currently the more affordable of the two stocks.
This table compares King Digital Entertainment PLC and Radware’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|King Digital Entertainment PLC||19.58%||33.71%||24.95%|
This is a summary of recent ratings and target prices for King Digital Entertainment PLC and Radware, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|King Digital Entertainment PLC||0||0||0||0||N/A|
Radware has a consensus target price of $20.83, suggesting a potential upside of 7.22%. Given Radware’s higher possible upside, analysts plainly believe Radware is more favorable than King Digital Entertainment PLC.
Radware beats King Digital Entertainment PLC on 5 of the 9 factors compared between the two stocks.
King Digital Entertainment PLC Company Profile
King Digital Entertainment plc is an interactive entertainment company for the mobile world. The Company has four franchises: Candy Crush, Farm Heroes, Bubble Witch and Pet Rescue. The Company develops and publishes games that can be played on its king.com and royalgames.com Websites, Facebook and, mobile platforms, such as iOS and Android. The Company is involved in developing and monetizing digital games on multiple platforms. The Company’s games include Candy Crush Saga, Candy Crush Soda Saga, Farm Heroes Saga, Pet Rescue Saga and Bubble Witch 2 Saga. As of December 31, 2014, the Company had 533 million monthly active users (MAUs), 149 million daily active users (DAUs), 356 million monthly unique users (MUUs) and 8,344 million monthly unique payers (MUPs).
Radware Company Profile
Radware Ltd. is a provider of cyber security and application delivery solutions. The Company’s solutions incorporate Distributed Denial of Service protection, Web application firewall (WAF) and Application Delivery Controllers (ADC) technologies to enable its customers to provide cyber-attack mitigation solutions for a range of applications. The Company’s products and activities are focused on protecting against cyber-attacks and ensuring optimal application service level for enterprises’ and carriers’ data centers. Its solutions include application and network security, and application delivery. Its application and network Security products include DefensePro Attack Mitigation Device, AppWall Web Application Firewall, DefenseFlow Cyber Command and Control application, and DefensePipe Cloud Scrubbing Service. Its application delivery products include Alteon NG, LinkProof NG and FastView. Its management solutions include APSolute Vision, application performance monitoring and vDirect.
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