Financial Analysis: Mitel Networks (MITL) and Sierra Wireless (SWIR)
Mitel Networks (NASDAQ: MITL) and Sierra Wireless (NASDAQ:SWIR) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.
Institutional and Insider Ownership
84.5% of Mitel Networks shares are held by institutional investors. Comparatively, 26.1% of Sierra Wireless shares are held by institutional investors. 5.6% of Mitel Networks shares are held by insiders. Comparatively, 2.0% of Sierra Wireless shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of current ratings and price targets for Mitel Networks and Sierra Wireless, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Mitel Networks presently has a consensus target price of $13.05, suggesting a potential upside of 19.07%. Sierra Wireless has a consensus target price of $24.30, suggesting a potential upside of 48.44%. Given Sierra Wireless’ stronger consensus rating and higher possible upside, analysts clearly believe Sierra Wireless is more favorable than Mitel Networks.
Valuation & Earnings
This table compares Mitel Networks and Sierra Wireless’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Mitel Networks||$1.06 billion||1.26||-$49.70 million||($0.40)||-27.40|
|Sierra Wireless||$692.08 million||0.85||$4.13 million||$0.58||28.22|
Sierra Wireless has lower revenue, but higher earnings than Mitel Networks. Mitel Networks is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Mitel Networks has a beta of 2.43, meaning that its share price is 143% more volatile than the S&P 500. Comparatively, Sierra Wireless has a beta of 2.74, meaning that its share price is 174% more volatile than the S&P 500.
This table compares Mitel Networks and Sierra Wireless’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sierra Wireless beats Mitel Networks on 10 of the 14 factors compared between the two stocks.
Mitel Networks Company Profile
Mitel Networks Corporation provides cloud and on-site business communications and collaboration software, services, and solutions. It operates in two segments, Enterprise and Cloud. The Enterprise segment sells and supports products and services for premise-based customers, including its premise-based IP and TDM telephony platforms; desktop devices, and unified communications and collaborations (UCC); and contact center applications that are deployed on the customer's premise under the MiVoice brand. The Cloud segment offers retail cloud services, such as UCC applications, voice and data telecommunications, and desktop devices that provide hosted cloud and related services directly to the end users under the MiCloud brand. It also provides wholesale services comprising hosted PBX, voice and video calling, SIP trunking, voicemail, call center, audio conferencing, and video and Web collaboration services to service providers under the Powered by Mitel brand. The company sells its solutions through direct and indirect channels, as well as through strategic technology partnerships in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Mitel Networks Corporation was incorporated in 2001 and is headquartered in Ottawa, Canada.
Sierra Wireless Company Profile
Sierra Wireless, Inc., together with its subsidiaries, engages in building the Internet of Things (IoT) with intelligent wireless solutions in North America, Europe, and the Asia Pacific. It operates in three segments: Original Equipment Manufacturer (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment offers embedded cellular modules, short range wireless modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; and Legato, an open source, Linux-based application framework. This segment provides its products and solutions to a range of industries, including automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, and other industries. It also offers professional services to OEM customers during their product development and launch process. The Enterprise Solutions segment provides a range of second, third, and fourth generation LTE intelligent cellular routers and gateways, as well as security and device management solutions, and professional services to public safety, transportation field service, energy, industrial, retail, and financial enterprises. The Cloud and Connectivity Services segment provides secure and scalable cloud based platform for deploying and managing IoT subscriptions, devices, data, and applications; connectivity services, which include smart SIM and core network platforms; and managed broadband cellular services. Sierra Wireless, Inc. sells its products directly, as well as through various indirect channels, such as OEMs, distributors, value added resellers, and hardware vendors, as well as SIM vendors and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.
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