Contrasting Switch (SWCH) & Internap (INAP)

Internap (NASDAQ:INAP) and Switch (NYSE:SWCH) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Profitability

This table compares Internap and Switch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Internap -16.18% -2,471.65% -7.11%
Switch -12.35% 0.49% 0.21%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Internap and Switch, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Internap 0 1 3 0 2.75
Switch 0 6 6 0 2.50

Internap presently has a consensus target price of $18.00, indicating a potential upside of 159.37%. Switch has a consensus target price of $15.94, indicating a potential upside of 71.63%. Given Internap’s stronger consensus rating and higher possible upside, research analysts plainly believe Internap is more favorable than Switch.

Institutional and Insider Ownership

83.9% of Internap shares are held by institutional investors. Comparatively, 18.3% of Switch shares are held by institutional investors. 5.9% of Internap shares are held by insiders. Comparatively, 12.6% of Switch shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Internap and Switch’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Internap $280.72 million 0.63 -$45.34 million ($1.55) -4.48
Switch $378.27 million 6.21 -$15.20 million N/A N/A

Switch has higher revenue and earnings than Internap.

Dividends

Switch pays an annual dividend of $0.06 per share and has a dividend yield of 0.6%. Internap does not pay a dividend.

Summary

Switch beats Internap on 9 of the 12 factors compared between the two stocks.

Internap Company Profile

Internap Corporation provides Internet infrastructure services. It operates through two business segments, INAP COLO and INAP CLOUD. The INAP COLO segment offers colocation services, including physical space within data centers and related services, such as power, interconnection, environmental controls, monitoring, and security; and Internet protocol (IP) connectivity services comprising its patented Performance IP and content delivery network services, IP routing hardware and software platforms, and Managed Internet Route Optimizer controllers. This segment offers its colocation services through 56 data centers and 97 points of presence worldwide. The INAP CLOUD segment provides hosted Infrastructure-as-a-Service as a cloud platform or through managed hosting that includes the provision and maintenance of hardware, data center infrastructure, and interconnection that enables its customers to own and manage their software applications and content. This segment offers cloud and managed hosting services, which comprise compute and storage services, as well as a single tenant infrastructure environment through an integrated platform that includes servers, storage, and network. The company serves various industries, including healthcare; advertising technology; financial; technology infrastructure; and gaming and software. The company was formerly known as Internap Network Services Corporation and changed its name to Internap Corporation in November 2014. Internap Corporation was founded in 1996 and is headquartered in Reston, Virginia.

Switch Company Profile

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services to technology and digital media companies, cloud and managed service providers, financial institutions, and telecommunications providers that conduct critical business on the Internet. The company develops and operates data centers in Nevada, Michigan, and Georgia. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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