Comparing Open Text (OTEX) & Aerohive Networks (HIVE)

Aerohive Networks (NYSE: HIVE) and Open Text (NASDAQ:OTEX) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Risk & Volatility

Aerohive Networks has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, Open Text has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Profitability

This table compares Aerohive Networks and Open Text’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aerohive Networks -13.93% -95.00% -15.69%
Open Text 8.32% 7.76% 3.64%

Institutional and Insider Ownership

48.1% of Aerohive Networks shares are owned by institutional investors. Comparatively, 67.7% of Open Text shares are owned by institutional investors. 26.1% of Aerohive Networks shares are owned by company insiders. Comparatively, 10.6% of Open Text shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Open Text pays an annual dividend of $0.61 per share and has a dividend yield of 1.7%. Aerohive Networks does not pay a dividend. Open Text pays out 15.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Aerohive Networks and Open Text’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aerohive Networks $152.90 million 1.45 -$22.92 million ($0.41) -9.93
Open Text $2.29 billion 4.08 $1.03 billion $4.01 8.72

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Aerohive Networks and Open Text, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aerohive Networks 0 1 1 0 2.50
Open Text 1 0 9 0 2.80

Aerohive Networks presently has a consensus price target of $5.25, indicating a potential upside of 28.99%. Open Text has a consensus price target of $44.89, indicating a potential upside of 28.40%. Given Aerohive Networks’ higher possible upside, research analysts clearly believe Aerohive Networks is more favorable than Open Text.

Summary

Open Text beats Aerohive Networks on 12 of the 16 factors compared between the two stocks.

Aerohive Networks Company Profile

Aerohive Networks, Inc., together with its subsidiaries, designs and develops cloud networking and enterprise Wi-Fi solutions in the Americas, Europe, the Middle East and Africa, and the Asia Pacific. The company provides hardware products, such as wireless access points, branch routers, and switches; tiered maintenance and support services comprising technical support, bug fixes, access to priority hardware replacement service, and unspecified upgrades; and Software as a Service subscriptions, including comparable maintenance and support services. Its cloud-based product comprises HiveManager NG, a network management application that features an updated user, improved troubleshooting, and expanded access to data and analytics, as well as an upgraded cloud-deployment platform. The company sells its products to industry verticals, including education, distributed enterprises, retail, healthcare, and healthcare through a network of authorized value-added resellers, value-added distributors, and managed service providers. Aerohive Networks, Inc. was incorporated in 2006 and is headquartered in Milpitas, California.

Open Text Company Profile

Open Text Corporation provides a suite of software products and services that assist organizations in finding, utilizing, and sharing business information from various devices. The company offers content solutions that provide content and records management, archiving, and email management and capture solutions, as well as Core, a software as a service based multi-tenant cloud solution; business process management for analyzing, automating, monitoring, and optimizing structured business processes; and customer experience management products, which offer Web content management, digital asset management, customer communications management, social software, and portal. Its products also include business network solutions comprising business-to-business integration, fax solutions, and secure messaging; analytics solutions, including embedded reporting and visualization, and big data analysis; and discovery solutions consisting of search, semantic navigation, and auto classification, as well as InfoFusion to deal with the issue of ?information silos' resulting from disconnected information sources across the enterprise. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it offers professional services, such as consulting and learning services relating for the implementation, training, and integration of its product offerings into the customer's systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks. The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.

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