Boingo Wireless (NASDAQ:WIFI) and iPass (IPAS) Critical Review

Boingo Wireless (NASDAQ: WIFI) and iPass (NASDAQ:IPAS) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Boingo Wireless and iPass, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boingo Wireless 1 0 7 0 2.75
iPass 0 1 4 0 2.80

Boingo Wireless presently has a consensus price target of $18.04, suggesting a potential downside of 6.36%. iPass has a consensus price target of $2.61, suggesting a potential upside of 335.42%. Given iPass’ stronger consensus rating and higher possible upside, analysts clearly believe iPass is more favorable than Boingo Wireless.

Profitability

This table compares Boingo Wireless and iPass’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boingo Wireless -13.85% -25.82% -6.63%
iPass -20.49% -78.31% -41.09%

Institutional & Insider Ownership

81.4% of Boingo Wireless shares are held by institutional investors. Comparatively, 24.1% of iPass shares are held by institutional investors. 7.7% of Boingo Wireless shares are held by insiders. Comparatively, 5.7% of iPass shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Boingo Wireless and iPass’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Boingo Wireless $179.14 million 4.31 $38.33 million ($0.64) -30.11
iPass $59.75 million 0.67 -$10.62 million ($0.19) -3.16

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

Risk & Volatility

Boingo Wireless has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, iPass has a beta of -0.38, indicating that its stock price is 138% less volatile than the S&P 500.

Summary

Boingo Wireless beats iPass on 10 of the 13 factors compared between the two stocks.

Boingo Wireless Company Profile

Boingo Wireless, Inc. is a provider of commercial mobile wireless fidelity (Wi-Fi) Internet solutions and indoor Distributed Antenna System (DAS) services. The Company operates as a service provider of wireless connectivity solutions across its managed and operated network and aggregated network for mobile devices such as laptops, smartphones, tablets and other wireless-enabled consumer devices. It acquires long-term wireless rights at venues, such as airports, transportation hubs, stadiums, arenas, universities, convention centers, and office campuses; builds wireless networks, such as DAS, Wi-Fi and small cells at those venues, and monetizes the wireless networks through a range of products and services. As of December 31, 2016, the Company operated 36 DAS networks containing approximately 19,200 DAS nodes. Its Wi-Fi network includes locations that the Company manages and operates, as well as networks managed and operated by third-parties with whom it contracts for access.

iPass Company Profile

iPass Inc. (iPass), is a provider of global mobile connectivity, offering wireless fidelity (Wi-Fi) on mobile devices. The Company, through its Mobile Connectivity Services segment, offers a cloud-based solution allowing its customers and their users’ access to its global Wi-Fi network to stay connected to the people and information. The Company has categorized its services into two approaches: Enterprise and Strategic Partnerships. Enterprise, formerly Open Mobile Enterprise (OME), focuses on providing mobile connectivity solutions to enterprises, from large to small. Strategic Partnerships, formerly Open Mobile Exchange (OMX), is executed through business development deals intended to open channel distributions for its product to reach the consumer market. Strategic Partnerships include global Original Equipment Manufacturers (OEMs), programs, including credit card companies, software product and service providers, and communication companies.

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