Head to Head Comparison: Zynga (ZNGA) versus iPass (IPAS)

Zynga (NASDAQ: ZNGA) and iPass (NASDAQ:IPAS) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Risk and Volatility

Zynga has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, iPass has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.

Institutional and Insider Ownership

70.7% of Zynga shares are owned by institutional investors. Comparatively, 17.3% of iPass shares are owned by institutional investors. 11.9% of Zynga shares are owned by company insiders. Comparatively, 8.2% of iPass shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Zynga 4.77% 2.57% 2.17%
iPass -39.29% -659.67% -103.58%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Zynga and iPass, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zynga 1 4 7 0 2.50
iPass 0 0 3 0 3.00

Zynga presently has a consensus price target of $4.46, indicating a potential upside of 12.15%. iPass has a consensus price target of $1.80, indicating a potential upside of 444.46%. Given iPass’ stronger consensus rating and higher possible upside, analysts plainly believe iPass is more favorable than Zynga.

Earnings & Valuation

This table compares Zynga and iPass’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zynga $861.39 million 3.96 $26.63 million $0.03 132.67
iPass $54.40 million 0.44 -$20.55 million ($0.31) -1.07

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

Summary

Zynga beats iPass on 12 of the 14 factors compared between the two stocks.

About Zynga

Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company's games are played on mobile platforms, such as iOS and Android operating systems, as well as on social networking sites, including Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual goods and sponsorships to advertising agencies and brokers; and software licensing and maintenance services related to NaturalMotion technology, as well as licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California.

About iPass

iPass Inc. provides mobile connectivity that enables Wi-Fi access on various mobile devices in the United States and internationally. It offers mobile connectivity services that provide cloud-based solution allowing customers and their users access to its Wi-Fi network to stay connected to the people and information. The company provides business to business mobile connectivity solutions to large and small enterprises, as well as to strategic partnerships comprising original equipment manufacturers, loyalty programs, software product and service providers, and communication companies; and iPass SmartConnect that takes the guesswork out of Wi-Fi automatically connecting customers to the hotspot for their needs. It operates hotspots at airports, hotels, train stations, convention centers, outdoor venues, inflight, and others. The company sells its services directly through its global sales force, as well as through reseller and strategic partners. iPass Inc. was founded in 1996 and is headquartered in Redwood Shores, California.

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