Zoom Technologies (ZOOM) versus ADTRAN (ADTN) Critical Review

Zoom Technologies (OTCMKTS:ZOOM) and ADTRAN (NASDAQ:ADTN) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Dividends

ADTRAN pays an annual dividend of $0.36 per share and has a dividend yield of 2.8%. Zoom Technologies does not pay a dividend. ADTRAN pays out 40.4% of its earnings in the form of a dividend.

Profitability

This table compares Zoom Technologies and ADTRAN’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zoom Technologies N/A N/A N/A
ADTRAN -3.94% -2.20% -1.61%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Zoom Technologies and ADTRAN, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zoom Technologies 0 0 0 0 N/A
ADTRAN 0 6 2 0 2.25

ADTRAN has a consensus target price of $17.71, indicating a potential upside of 39.11%. Given ADTRAN’s higher possible upside, analysts plainly believe ADTRAN is more favorable than Zoom Technologies.

Insider & Institutional Ownership

94.3% of ADTRAN shares are owned by institutional investors. 17.7% of Zoom Technologies shares are owned by insiders. Comparatively, 2.5% of ADTRAN shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Zoom Technologies and ADTRAN’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zoom Technologies N/A N/A N/A N/A N/A
ADTRAN $666.58 million 0.91 $23.84 million $0.89 14.30

ADTRAN has higher revenue and earnings than Zoom Technologies.

Risk and Volatility

Zoom Technologies has a beta of 102.11, meaning that its stock price is 10,111% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Summary

Zoom Technologies beats ADTRAN on 6 of the 11 factors compared between the two stocks.

Zoom Technologies Company Profile

Zoom Technologies, Inc. does not have significant operations. Previously, it distributed wireless communication products in the United States. The company is headquartered in Beijing, China.

ADTRAN Company Profile

ADTRAN, Inc. provides networking and communications equipment worldwide. The company operates through two segments, Network Solutions and Services & Support. It offers access and aggregation solutions, including network management and subscriber services control and orchestration software within a SD-access architecture; SDN-controlled programmable network elements; fiber to the premises and fiber to the node (FTTN) multi-service access nodes (MSAN); fiber aggregation and FTTN MSAN; fiber to the distribution point optical network units; optical line terminals; optical networking edge aggregation; and IP digital subscriber line access multiplexers. The company's access and aggregation solutions also comprise cabinet and outside-plant enclosures and services; pluggable optical transceivers, cables, and other miscellaneous materials; and other products and services. In addition, it provides customer devices comprising broadband customer premise solutions, such as passive optical network and point-to-point Ethernet optical network terminals; radio frequency over glass micro nodes; residential and business gateways; Wi-Fi access points and related powering and switching infrastructure; enterprise session border controllers; carrier Ethernet services termination devices; voice over Internet protocol media gateways; and other products and services. Further, the company offers time division multiplexed and asynchronous transfer mode based aggregation systems and customer devices; HDSL, ADSL, and other technologies; and other products and services. Additionally, it provides planning, engineering, program management, maintenance, support, installation, commissioning, and implementation services. The company serves communications service providers, distributed enterprises and small and medium-sized businesses, public and private enterprises, and individual users. ADTRAN, Inc. was founded in 1985 and is headquartered in Huntsville, Alabama.

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