Comparing Red Hat Software (RHT) and Snap (SNAP)

Red Hat Software (NYSE: RHT) and Snap (NYSE:SNAP) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

95.5% of Red Hat Software shares are owned by institutional investors. Comparatively, 21.4% of Snap shares are owned by institutional investors. 0.7% of Red Hat Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Red Hat Software and Snap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Hat Software 8.86% 29.36% 8.50%
Snap -179.04% -49.23% -43.89%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Red Hat Software and Snap, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat Software 1 9 23 0 2.67
Snap 11 16 9 0 1.94

Red Hat Software currently has a consensus target price of $156.25, indicating a potential downside of 4.88%. Snap has a consensus target price of $15.47, indicating a potential upside of 45.22%. Given Snap’s higher probable upside, analysts plainly believe Snap is more favorable than Red Hat Software.

Volatility & Risk

Red Hat Software has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Snap has a beta of -2.52, meaning that its share price is 352% less volatile than the S&P 500.

Earnings and Valuation

This table compares Red Hat Software and Snap’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Hat Software $2.92 billion 9.99 $258.80 million $2.30 71.42
Snap $824.95 million 16.24 -$3.45 billion ($2.08) -5.12

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

Summary

Red Hat Software beats Snap on 12 of the 14 factors compared between the two stocks.

About Red Hat Software

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company's application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

About Snap

Snap Inc. operates as a camera company in the United States and internationally. The company offers Snapchat, a camera application that helps people to communicate through short videos and images. It also provides Camera, a tool to personalize and add context to Snaps; Friends Page that allows to creating and watching stories, chatting with groups, making voice and video calls, and communicating through a range of contextual stickers and Bitmojis; and Discover that helps to surface the most interesting stories from publishers, creators, and the community, based on a user's subscriptions and interests. In addition, the company offers Snap Map, which enables individuals to pinch on the camera screen for bringing a live map of their location, as well as showing nearby friends, popular stories, and a heatmap of recent Snaps posted to their story; Memories that allows users to choose to save the Snaps they create in a searchable personal collection, and users to create Snaps and stories from their saved Snaps and camera roll; and Spectacles, a hardware product that connects with Snapchat and capture video from a human perspective. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Venice, California.

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