GigaMedia (NASDAQ:GIGM) and Red Hat (NYSE:RHT) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Earnings & Valuation

This table compares GigaMedia and Red Hat’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GigaMedia $7.10 million 3.70 -$3.19 million N/A N/A
Red Hat $3.36 billion 9.74 $433.99 million $2.79 66.06

Red Hat has higher revenue and earnings than GigaMedia.

Institutional and Insider Ownership

4.7% of GigaMedia shares are held by institutional investors. Comparatively, 89.2% of Red Hat shares are held by institutional investors. 1.0% of GigaMedia shares are held by insiders. Comparatively, 0.6% of Red Hat 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for GigaMedia and Red Hat, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GigaMedia 0 0 0 0 N/A
Red Hat 0 13 10 0 2.43

Red Hat has a consensus target price of $167.19, suggesting a potential downside of 9.28%. Given Red Hat’s higher probable upside, analysts clearly believe Red Hat is more favorable than GigaMedia.

Profitability

This table compares GigaMedia and Red Hat’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GigaMedia -44.71% -4.57% -4.25%
Red Hat 12.91% 35.35% 9.84%

Risk and Volatility

GigaMedia has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Red Hat has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Summary

Red Hat beats GigaMedia on 9 of the 10 factors compared between the two stocks.

About GigaMedia

GigaMedia Limited provides digital entertainment services in Taiwan, Hong Kong, and Macau. The company offers mobile and browser-based casual games through FunTown-branded platform. Its portfolio of PC-based casual games include MahJong, a traditional Chinese tile game; sports games, Web-based RPG, and mobile games; online card games; and chance-based games, including bingo, lotto, horse racing, Sic-Bo, slots, and various casual games. The company also provides Tales Runner, a multi-player online obstacle running game in which players competes by running, jumping, dashing and using items. In addition, it owns and operates GigaCloud, a provider of cloud computing solutions and related services focused on the cloud services market for SMEs in Taiwan. GigaMedia Limited was founded in 1997 and is headquartered in Taipei, Taiwan.

About Red Hat

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company's application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. Red Hat, Inc. has collaboration with Juniper Networks Expand to provide a unified solution for enterprises designed to manage and run applications and services. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

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