Fiserv (NASDAQ:FISV) and Ooma (NYSE:OOMA) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Fiserv and Ooma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fiserv 20.39% 47.56% 12.09%
Ooma -11.28% -38.78% -17.97%

Earnings & Valuation

This table compares Fiserv and Ooma’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiserv $5.82 billion 5.80 $1.19 billion $3.10 27.82
Ooma $129.23 million 2.40 -$14.57 million ($0.69) -22.33

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

Insider & Institutional Ownership

86.4% of Fiserv shares are held by institutional investors. Comparatively, 77.2% of Ooma shares are held by institutional investors. 1.7% of Fiserv shares are held by company insiders. Comparatively, 10.5% of Ooma shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Fiserv and Ooma, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiserv 1 6 12 0 2.58
Ooma 0 1 3 0 2.75

Fiserv presently has a consensus target price of $86.64, indicating a potential upside of 0.47%. Ooma has a consensus target price of $17.83, indicating a potential upside of 15.73%. Given Ooma’s stronger consensus rating and higher possible upside, analysts clearly believe Ooma is more favorable than Fiserv.

Volatility and Risk

Fiserv has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Ooma has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Summary

Fiserv beats Ooma on 10 of the 14 factors compared between the two stocks.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. The company's Payments and Industry Products segment provides electronic bill payment and presentment services; Internet and mobile banking software and services; account-to-account transfers; person-to-person payment services; debit and credit card processing and services; payments infrastructure services; and other electronic payments software and services. This segment also offers card and print personalization services; investment account processing services for separately managed accounts; and fraud and risk management products and services. Its Financial Institution Services segment provides account processing, item processing and source capture, loan origination and servicing products, cash management and consulting services, and other products and services that support various types of financial transactions. This segment also provides ACH and treasury management, case management and resolution, and source capture optimization services to the financial services industry. The company also provides bank payment and liquidity management solutions, as well as Internet based mortgage software and mortgage lending technology solutions. It serves banks, credit unions, investment management firms, leasing and finance companies, billers, retailers, and merchants. The company was founded in 1984 and is headquartered in Brookfield, Wisconsin.

About Ooma

Ooma, Inc. provides communications solutions and other connected services to small business, home, and mobile users in the United States and Canadian markets. The company's Ooma Office, a multi-user communications system comprise an on-premise appliance and Ooma Linx end-point device that wirelessly connects regular desktop telephones and fax machines to the user's high-speed Internet connection; and Ooma Office Mobile HD app, which allows users to make, receive, and transfer phone calls. Its Ooma Telo, a home communications solution includes Ooma Premier Service, a suite of advanced calling features that have been designed to enhance the capabilities of Ooma Telo on a monthly or annual subscription basis; and Ooma Mobile HD app, which allows users to make and receive phone calls and access Ooma features and settings with iOS or Android device over a Wi-Fi or cellular data connection. In addition, the company offers Ooma Telo Air, a wireless device that connects to the Internet using the home's Wi-Fi network and can be paired with mobile phones to answer incoming mobile calls from phone in the home; Ooma handset, a Cordless handset; Wireless + bluetooth adapter, which allows users to install the Ooma Telo device anywhere in the home within range of their wireless network; and Safety phone, a wireless hands-free speakerphone that can be worn as a pendant. Further, it provides Ooma Home, a do-it-yourself home security solution; and Talkatone, a mobile app. The company offers its products through direct sales, retailers, and online, as well as through distributors and reseller partnership channels. Ooma, Inc. was incorporated in 2003 and is headquartered in Sunnyvale, California.

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