Analyzing Sonus Networks (SONS) and Alcatel Lucent SA (ALU)

Sonus Networks (NASDAQ: SONS) and Alcatel Lucent SA (NYSE:ALU) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Profitability

This table compares Sonus Networks and Alcatel Lucent SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonus Networks -8.82% -1.87% -1.32%
Alcatel Lucent SA 14.83% 86.14% 10.96%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Sonus Networks and Alcatel Lucent SA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonus Networks 1 1 5 0 2.57
Alcatel Lucent SA 0 0 0 0 N/A

Sonus Networks presently has a consensus price target of $8.71, indicating a potential upside of 22.83%. Given Sonus Networks’ higher possible upside, analysts plainly believe Sonus Networks is more favorable than Alcatel Lucent SA.

Earnings & Valuation

This table compares Sonus Networks and Alcatel Lucent SA’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sonus Networks $252.59 million 1.41 -$13.93 million ($0.45) -15.76
Alcatel Lucent SA N/A N/A N/A $0.08 43.25

Alcatel Lucent SA has higher revenue, but lower earnings than Sonus Networks. Sonus Networks is trading at a lower price-to-earnings ratio than Alcatel Lucent SA, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Sonus Networks has a beta of 2.12, suggesting that its stock price is 112% more volatile than the S&P 500. Comparatively, Alcatel Lucent SA has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500.

Insider & Institutional Ownership

67.8% of Sonus Networks shares are owned by institutional investors. 7.7% of Sonus Networks shares are owned by company 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.

Summary

Sonus Networks beats Alcatel Lucent SA on 6 of the 10 factors compared between the two stocks.

About Sonus Networks

Sonus Networks, Inc. (Sonus) is a provider of networked solutions for communications service providers and enterprises to help them secure and unify their real-time communications infrastructures. The Company helps communications service providers and enterprises hold the session initiation protocol (SIP) and fourth generation (4G)/long term evolution (LTE)-based solutions, including voice over Internet protocol (VoIP), voice over wireless fidelity (VoWiFi), video and unified communications (UC) by securing and enabling Internet Protocol (IP) networks. Its products include session border controllers (SBCs), diameter signaling controllers (DSCs) and VoWiFi solutions. Sonus Products include Sonus GSX9000 Open Services Switch, Sonus T7000 Intelligent Switching System, Sonus Diameter Signaling Controllers, Sonus Signal Transfer Points, Sonus PSX Policy & Routing Server, Sonus WebRTC Services Solution, Sonus Network Management Solutions and Virtualized Mobile Core (VMC) Solution.

About Alcatel Lucent SA

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

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