Harmonic (NASDAQ:HLIT) and Ooma (NYSE:OOMA) Financial Review

Harmonic (NASDAQ:HLIT) and Ooma (NYSE:OOMA) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Harmonic and Ooma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harmonic	7.72%	18.28%	10.41%
Ooma	-1.89%	2.72%	1.54%

Earnings & Valuation

This table compares Harmonic and Ooma”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harmonic	$678.72 million	1.46	$39.22 million	$0.45	19.53
Ooma	$256.85 million	1.32	-$6.90 million	($0.19)	-64.60

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

Volatility and Risk

Harmonic has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Ooma has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Institutional & Insider Ownership

99.4% of Harmonic shares are held by institutional investors. Comparatively, 80.4% of Ooma shares are held by institutional investors. 1.2% of Harmonic shares are held by company insiders. Comparatively, 9.9% of Ooma shares are held by company 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Harmonic and Ooma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harmonic	1	1	4	0	2.50
Ooma	0	1	4	0	2.80

Harmonic presently has a consensus price target of $12.33, suggesting a potential upside of 40.31%. Ooma has a consensus price target of $17.63, suggesting a potential upside of 43.60%. Given Ooma’s stronger consensus rating and higher possible upside, analysts plainly believe Ooma is more favorable than Harmonic.

Summary

Harmonic beats Ooma on 9 of the 13 factors compared between the two stocks.

About Harmonic

Harmonic Inc., together with its subsidiaries, provides broadband solutions worldwide. The company operates through Broadband and Video segments. The Broadband segment sells broadband access solutions and related services, including cOS software-based broadband access solutions to broadband operators; and cOS central cloud services, a subscription service for cOS customers. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telco Pay-TV service providers, as well as to broadcast and media, including streaming media companies. Its video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors. This segment also provides VOS360 SaaS platform that provides both streaming and channel origination and distribution services; and software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, VOD, catch-up TV, start-over TV, network-DVR and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, integration services, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was incorporated in 1988 and is headquartered in San Jose, California.

About Ooma

Ooma, Inc. provides communications services and related technologies for businesses and consumers in the United States and Canada. The company's products and services include Ooma Office, a cloud-based multi-user communications system for small and medium-sized businesses; Ooma Connect, which delivers fixed wireless internet connectivity; and Ooma Enterprise, a unified-communications-as-a-service (UCaaS) solution. It also provides Ooma AirDial, a plain old telephone service; PureVoice HD, a residential phone services; Ooma basic that provides unlimited personal calling within the United States; and Ooma Premier, a suite of advanced calling features on a monthly or annual subscription basis. In addition, the company offers Ooma Telo, a home communications solution designed to serve as the primary phone line in the home; Ooma Telo Air, a wireless Ooma Telo with built-in Wi-Fi and Bluetooth; and Ooma Telo LTE, which combines the Ooma Telo base station with the Ooma LTE Adapter and battery back-up. Further, it provides Ooma Mobile HD app that allows users to make and receive phone calls and access Ooma features and settings; 2600Hz provides business communication applications; Talkatone mobile app; and OnSIP, an UCaaS solutions. The company offers its products through direct sales, distributors, retailers, and resellers, as well as online and sale representatives. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.