Ubiquiti (NYSE:UI) & NETGEAR (NASDAQ:NTGR) Financial Review

NETGEAR (NASDAQ:NTGR) and Ubiquiti (NYSE:UI) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Profitability

This table compares NETGEAR and Ubiquiti’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NETGEAR	-3.71%	-2.79%	-1.67%
Ubiquiti	30.43%	95.62%	56.55%

Analyst Ratings

This is a breakdown of current recommendations for NETGEAR and Ubiquiti, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NETGEAR	1	1	2	0	2.25
Ubiquiti	1	0	2	1	2.75

NETGEAR presently has a consensus target price of $36.00, suggesting a potential upside of 49.25%. Ubiquiti has a consensus target price of $750.67, suggesting a potential upside of 29.68%. Given NETGEAR’s higher possible upside, analysts clearly believe NETGEAR is more favorable than Ubiquiti.

Volatility & Risk

NETGEAR has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Ubiquiti has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Institutional and Insider Ownership

83.0% of NETGEAR shares are owned by institutional investors. Comparatively, 4.0% of Ubiquiti shares are owned by institutional investors. 3.1% of NETGEAR shares are owned by company insiders. Comparatively, 93.1% of Ubiquiti shares are owned by company 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.

Valuation and Earnings

This table compares NETGEAR and Ubiquiti”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NETGEAR	$699.62 million	0.94	-$17.92 million	($0.93)	-25.94
Ubiquiti	$2.57 billion	13.61	$711.92 million	$15.56	37.20

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

Summary

Ubiquiti beats NETGEAR on 12 of the 14 factors compared between the two stocks.

About NETGEAR

NETGEAR, Inc. provides connectivity solutions the Americas; Europe, the Middle East, Africa; and the Asia Pacific. The company operates in two segments, Connected Home, and NETGEAR for Business. The Connected Home segment offers Wi-Fi routers and home Wi-Fi mesh systems, Wi-Fi hotspots, digital displays, broadband modems, Wi-Fi gateways, Wi-Fi range extenders, powerline adapters, and Wi-Fi network adapters; and provides value-added service offerings, including security and privacy, technical support, and parental controls. The NETGEAR for Business segment provides pro AV Solutions; pro routers; enterprise grade cloud managed or standalone access points; general purpose ethernet switches; NETGEAR Insight remote management software; and NETGEAR engage controller. It markets and sells its products through wholesale distributors, traditional and online retailers, direct market resellers, value-added resellers, and broadband service providers, as well as through its direct online store. The company was incorporated in 1996 and is headquartered in San Jose, California.

About Ubiquiti

Ubiquiti Inc. develops networking technology for service providers, enterprises, and consumers. The company develops technology platforms for high-capacity distributed Internet access, unified information technology, and consumer electronics for professional, home, and personal use. Its service provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems, and routing and related software; and enterprise product platforms provide wireless LAN infrastructure, video surveillance products, switching and routing solutions, security gateways, door access systems, and other WLAN products. The company also provides technology platforms, such as airMAX, which include proprietary protocols that contain technologies for minimizing signal noise; EdgeMAX, a software and system routing platform; airFiber, a wireless backhaul point-to-point radio system; and UFiber GPON, a plug and play fiber network technology to build high speed fiber internet networks. In addition, it offers UniFi Gateway Console, an enterprise class router and security gateway device; UniFi Wi-Fi, an enterprise Wi-Fi system; UniFi Protect, a video surveillance system, which provides statistical reporting and advanced analytics; UniFi Switch that deliver performance, switching, and power of ethernet support for enterprise networks; UniFi Access, a door access system; and UniFi Talk, a plug-and-play phone system and VoIP subscription service. Further, the company provides base stations, radios, backhaul equipment, and customer premise equipment; embedded radio products; and antennas. It serves customers through a network of distributors, online retailers, and direct to customers worldwide. The company was formerly known as Ubiquiti Networks, Inc. and changed its name to Ubiquiti Inc. in August 2019. Ubiquiti Inc. was incorporated in 2003 and is headquartered in New York, New York.