Contrasting Switch (SWCH) and Its Rivals

Switch (NYSE: SWCH) is one of 52 public companies in the “Computer programming, data processing, & other computer related” industry, but how does it weigh in compared to its rivals? We will compare Switch to similar companies based on the strength of its dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Insider and Institutional Ownership

19.0% of Switch shares are held by institutional investors. Comparatively, 47.6% of shares of all “Computer programming, data processing, & other computer related” companies are held by institutional investors. 12.6% of Switch shares are held by company insiders. Comparatively, 14.5% of shares of all “Computer programming, data processing, & other computer related” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Switch and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Switch $405.86 million $4.05 million 125.67
Switch Competitors $7.81 billion $1.84 billion 8.59

Switch’s rivals have higher revenue and earnings than Switch. Switch is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Switch pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Switch pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Computer programming, data processing, & other computer related” companies pay a dividend yield of 1.0% and pay out 31.2% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Switch and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Switch 0 5 7 0 2.58
Switch Competitors 726 2597 5588 283 2.59

Switch presently has a consensus target price of $13.50, indicating a potential upside of 19.36%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 90.21%. Given Switch’s rivals stronger consensus rating and higher probable upside, analysts clearly believe Switch has less favorable growth aspects than its rivals.

Profitability

This table compares Switch and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Switch 1.00% 0.56% 0.28%
Switch Competitors -6.63% -5.46% -2.37%

Volatility and Risk

Switch has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Switch’s rivals have a beta of 1.40, indicating that their average stock price is 40% more volatile than the S&P 500.

Summary

Switch rivals beat Switch on 10 of the 15 factors compared.

Switch Company Profile

Switch, Inc., through its subsidiary, Switch, Ltd., provides colocation space and related services primarily to technology and digital media companies in the United States. It develops and operates data centers in Nevada and Michigan. The company also serves cloud and managed service providers, financial institutions, IT and software providers, government agencies, network and telecommunications providers, and others that conduct critical business on the Internet. Switch, Inc. was founded in 2000 and is headquartered in Las Vegas, Nevada.

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