Ooma (OOMA) and Knowles (NYSE:KN) Financial Review

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

Analyst Ratings

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This is a summary of current recommendations and price targets for Ooma and Knowles, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ooma 0 3 2 0 2.40
Knowles 0 1 4 0 2.80

Ooma presently has a consensus price target of $14.00, indicating a potential upside of 26.13%. Knowles has a consensus price target of $18.10, indicating a potential upside of 50.33%. Given Knowles’ stronger consensus rating and higher possible upside, analysts plainly believe Knowles is more favorable than Ooma.

Risk & Volatility

Ooma has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Knowles has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Earnings & Valuation

This table compares Ooma and Knowles’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ooma $114.49 million 1.84 -$13.12 million ($0.69) -16.09
Knowles $744.20 million 1.45 $68.30 million $0.70 17.20

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

Profitability

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

Net Margins Return on Equity Return on Assets
Ooma -11.46% -32.84% -17.19%
Knowles 8.32% 6.28% 4.30%

Insider and Institutional Ownership

73.4% of Ooma shares are held by institutional investors. 48.2% of Ooma shares are held by insiders. Comparatively, 3.7% of Knowles shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Knowles beats Ooma on 11 of the 14 factors compared between the two stocks.

About Ooma

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

About Knowles

Knowles Corporation is a global supplier of micro-acoustic, audio processing and specialty component solutions, serving the mobile consumer electronics, communications, medical, military, aerospace and industrial markets. The Company operates through two segments: Mobile Consumer Electronics (MCE) and Specialty Components (SC). MCE designs and manufactures acoustic products, including microphones and audio processing technologies used in mobile handsets, wearables and other consumer electronic devices. SC specializes in the design and manufacture of specialized electronic components used in medical and life science applications, as well as solutions and components used in communications infrastructure and a range of other markets. It has sales, support and engineering facilities in North America, Europe and Asia, and manufacturing facilities in Asia. It also offers acoustics components used in hearing aids, as well as high-end oscillators (timing devices) and capacitors.

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