Ribbon Communications (NASDAQ:RBBN) & Ituran Location and Control (NASDAQ:ITRN) Critical Comparison

Ribbon Communications (NASDAQ:RBBN) and Ituran Location and Control (NASDAQ:ITRN) are both small-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and price targets for Ribbon Communications and Ituran Location and Control, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ribbon Communications	1	1	4	0	2.50
Ituran Location and Control	0	1	4	0	2.80

Ribbon Communications presently has a consensus target price of $3.20, indicating a potential upside of 99.38%. Ituran Location and Control has a consensus target price of $60.67, indicating a potential upside of 16.01%. Given Ribbon Communications’ higher possible upside, research analysts clearly believe Ribbon Communications is more favorable than Ituran Location and Control.

Valuation and Earnings

This table compares Ribbon Communications and Ituran Location and Control”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ribbon Communications	$844.56 million	0.34	$39.64 million	$0.10	16.05
Ituran Location and Control	$359.02 million	2.90	$57.97 million	$3.24	16.14

Ituran Location and Control has lower revenue, but higher earnings than Ribbon Communications. Ribbon Communications is trading at a lower price-to-earnings ratio than Ituran Location and Control, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ribbon Communications and Ituran Location and Control’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ribbon Communications	2.32%	20.61%	7.29%
Ituran Location and Control	16.28%	29.03%	16.29%

Institutional & Insider Ownership

70.9% of Ribbon Communications shares are held by institutional investors. Comparatively, 94.8% of Ituran Location and Control shares are held by institutional investors. 4.0% of Ribbon Communications shares are held by company insiders. Comparatively, 0.0% of Ituran Location and Control shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Ribbon Communications has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Ituran Location and Control has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Ituran Location and Control beats Ribbon Communications on 9 of the 13 factors compared between the two stocks.

About Ribbon Communications

Ribbon Communications Inc. provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It operates through two segments, Cloud and Edge, and IP Optical Networks. The Cloud and Edge segment provides software and hardware products, solutions, and services for voice over internet protocol communications, voice over long-term evolution, and voice over 5G communications, and unified communications and collaboration. It also offers session border controllers; and network transformation products, such as signaling products, call controllers, media gateways, and application servers. This segment serves private, public, or hybrid cloud infrastructures, as well as data centers, enterprise premises, and service provider networks. The IP Optical Networks segment provides hardware and software products and solutions for IP networking, switching, routing, and optical transport for technologies, such as 5G, distributed cloud computing, and corresponding applications. It also offers multiple solutions, including 5G-native solutions for mobile-backhaul, metro and edge aggregation, core networking, data center interconnect, multi-service access, and transport solutions for wholesale carriers. This segment serves utilities, government, defense, finance, transportation, and education and research industries, as well as service providers and enterprises. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Plano, Texas.

About Ituran Location and Control

Ituran Location and Control Ltd., together with its subsidiaries, provides location based telematics services and machine-to-machine telematics products. It operates through two segments, Telematics Services and Telematics Products. The Telematics services segment offers stolen vehicle recovery and tracking services, which enables to locate, track, and recover stolen vehicles for its subscribers; fleet management services that enable corporate and individual customers to track and manage their vehicles in real time; and locator services that allow customers to protect valuable merchandise and equipment. This segment also delivers on-demand navigation guidance, information, and assistance, including the provision of traffic reports and directions, as well as information on the location of gas stations, car repair shops, post offices, hospitals, and other facilities; and Connected Car, a service platform that includes a back-office application, a telematics device installed in the vehicle, mobile apps for IOS and Android users, and interface using the car infotainment screen, as well as usage based insurance and auto financing services. This segment serves insurance companies and agents, car manufacturers, dealers and importers, cooperative sales channels, and private subscribers. The Telematics Products segment offers Base Site, a radio receiver that includes a processor and a data computation unit to collect and send data to and from transponders, and to control centers; Control Center, a center consisting of software used to collect data from various base sites, conduct location calculations, and transmit location data to various customers and law enforcement agencies; navigation and tracking devices installed in vehicles; and SMART, a portable transmitter installed in vehicles that sends a signal to the base site enabling the location of vehicles, equipment, or an individual. The company was incorporated in 1994 and is headquartered in Azor, Israel.