Head to Head Review: NETGEAR (NTGR) & Aerohive Networks (HIVE)

NETGEAR (NASDAQ: NTGR) and Aerohive Networks (NYSE:HIVE) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, valuation, dividends, earnings and risk.

Profitability

This table compares NETGEAR and Aerohive Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NETGEAR 5.61% 11.30% 7.90%
Aerohive Networks -20.12% -109.99% -22.33%

Analyst Recommendations

This is a summary of recent ratings and price targets for NETGEAR and Aerohive Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NETGEAR 1 3 4 0 2.38
Aerohive Networks 0 3 4 0 2.57

NETGEAR currently has a consensus price target of $60.79, indicating a potential upside of 40.22%. Aerohive Networks has a consensus price target of $6.29, indicating a potential upside of 23.33%. Given NETGEAR’s higher probable upside, equities research analysts plainly believe NETGEAR is more favorable than Aerohive Networks.

Volatility & Risk

NETGEAR has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500. Comparatively, Aerohive Networks has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Insider & Institutional Ownership

98.8% of NETGEAR shares are owned by institutional investors. Comparatively, 53.3% of Aerohive Networks shares are owned by institutional investors. 6.2% of NETGEAR shares are owned by insiders. Comparatively, 26.2% of Aerohive Networks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares NETGEAR and Aerohive Networks’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NETGEAR $1.34 billion 1.05 $143.73 million $2.22 19.53
Aerohive Networks $166.05 million 1.34 -$27.46 million ($0.65) -7.85

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

Summary

NETGEAR beats Aerohive Networks on 9 of the 12 factors compared between the two stocks.

About NETGEAR

NETGEAR, Inc. designs, develops and markets networking solutions and smart connected products for consumers, businesses and service providers. The Company’s product line consists of devices, such as network attached storage, Internet protocol (IP) security cameras, and home automation devices and services. The Company’s segments include retail, commercial and service provider. The retail business unit is focused on individual consumers and consists of whole home wireless fidelity (WiFi) networking solutions and Smart connected products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, including fourth-generation (4G) long term evolution (LTE) hotspots sold to service providers for sale to their subscribers.

About Aerohive Networks

Aerohive Networks, Inc. together with its subsidiaries, has designed and developed a cloud-managed mobile networking platform that enables enterprises to deploy and manage a mobile-centric network edge. Its portfolio of products and solutions is built around sets of technologies and solutions, which include Enterprise Cloud Networking, Wireless Fidelity (Wi-Fi) Connectivity and Application and Insights. It conducts its business in geographic regions, including Americas; Europe, the Middle East and Africa, and Asia Pacific. Its product portfolio includes hardware products, cloud-based network management and applications, and support services. Its hardware products include access points, branch routers and access switches. Its hardware products are developed by its hardware design team working in conjunction with original design manufacturer partners, and leverage the commercially available Wi-Fi radios, network processors, crypto accelerators and switching chips.

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