magicJack VocalTec (NASDAQ: CALL) and ShoreTel (NASDAQ:SHOR) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitabiliy, dividends, analyst recommendations, earnings, institutional ownership and risk.
This is a summary of current ratings and price targets for magicJack VocalTec and ShoreTel, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ShoreTel has a consensus target price of $10.00, indicating a potential upside of 73.91%. Given ShoreTel’s higher probable upside, analysts plainly believe ShoreTel is more favorable than magicJack VocalTec.
Earnings and Valuation
This table compares magicJack VocalTec and ShoreTel’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|magicJack VocalTec||$96.90 million||1.21||$11.62 million||($1.13)||-6.46|
|ShoreTel||$356.63 million||1.10||$10.14 million||($0.17)||-33.82|
magicJack VocalTec has higher revenue, but lower earnings than ShoreTel. ShoreTel is trading at a lower price-to-earnings ratio than magicJack VocalTec, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
50.4% of magicJack VocalTec shares are owned by institutional investors. Comparatively, 87.2% of ShoreTel shares are owned by institutional investors. 2.3% of magicJack VocalTec shares are owned by company insiders. Comparatively, 4.0% of ShoreTel shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares magicJack VocalTec and ShoreTel’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
magicJack VocalTec has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, ShoreTel has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.
ShoreTel beats magicJack VocalTec on 8 of the 12 factors compared between the two stocks.
About magicJack VocalTec
magicJack VocalTec Ltd. and its subsidiaries is a cloud communications company. The Company provides magicJack devices and other magicJack products and services. The Company also provides additional products and services, which include voice applications on smart phones, as well as the magicJack PLUS, magicJack GO and magicJack EXPRESS, which are updated versions of the magicJack device that have their own central processing unit (CPU) and can connect a regular phone directly to the users broadband modem/router and function as a standalone phone without using a computer. The Company’s products and services allow users to make and/or receive free telephone calls to and from anywhere in the world where the customer has broadband access to the Internet, and allows customers to make free calls back to the United States and Canada from anywhere legally permitted in the world.
ShoreTel, Inc. is a provider of business communication solutions. The Company is engaged in the design, development, marketing and sale of business communication solutions. The Company is focused on the small and medium sized businesses seeking a unified communications (UC) solution allowing them to communicate anytime, anyplace and through any device they chose. The Company provides this to the market through two solutions: ShoreTel Connect, its UC solution, and Contact Center offering and ShoreTel Summit, its platform for developers and integrators. ShoreTel Connect delivers a featured UC solution and applications, such as mobility, collaboration and workgroups. ShoreTel Connect offers three different delivery models, including cloud, onsite and hybrid. Connect Cloud provides a hosted voice solution to its customers. Connect OnSite provides its customers the ability to own and operate their equipment. Connect Hybrid enables its customers to use both its cloud and onsite offerings.