Reviewing Extreme Networks (NASDAQ:EXTR) & Motorola Solutions (NYSE:MSI)

Extreme Networks (NASDAQ:EXTR) and Motorola Solutions (NYSE:MSI) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Institutional & Insider Ownership

91.0% of Extreme Networks shares are held by institutional investors. Comparatively, 84.2% of Motorola Solutions shares are held by institutional investors. 3.2% of Extreme Networks shares are held by company insiders. Comparatively, 1.3% of Motorola Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Extreme Networks and Motorola Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extreme Networks	0	2	7	1	2.90
Motorola Solutions	0	1	11	1	3.00

Extreme Networks currently has a consensus target price of $33.86, suggesting a potential upside of 34.30%. Motorola Solutions has a consensus target price of $545.70, suggesting a potential upside of 3.95%. Given Extreme Networks’ higher possible upside, equities research analysts clearly believe Extreme Networks is more favorable than Motorola Solutions.

Volatility & Risk

Extreme Networks has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Valuation and Earnings

This table compares Extreme Networks and Motorola Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extreme Networks	$1.28 billion	2.58	$42.12 million	$0.39	64.64
Motorola Solutions	$11.68 billion	7.44	$2.15 billion	$12.43	42.23

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

Profitability

This table compares Extreme Networks and Motorola Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extreme Networks	3.99%	102.41%	7.47%
Motorola Solutions	16.54%	99.35%	13.22%

Summary

Motorola Solutions beats Extreme Networks on 8 of the 14 factors compared between the two stocks.

About Extreme Networks

Extreme Networks, Inc. develops networking products and software for businesses and other organizations. Its offerings include wired and wireless network infrastructure, such as switches and Wi-Fi access points, along with cloud-based tools for managing, monitoring and securing networks. The company also provides network analytics, support and professional services. Its solutions are used across industries including education, healthcare, government, retail and hospitality. Founded in 1996, Extreme Networks has expanded through acquisitions, including Enterasys Networks and networking businesses from Brocade and Avaya.

About Motorola Solutions

Motorola Solutions, Inc. provides communications, software, video security and related services for public safety agencies and commercial and industrial organizations. Its products include two-way radios and land mobile radio systems, dispatch consoles, command center software, video surveillance systems and access control technology. The company’s offerings are designed to help customers coordinate communications, manage incidents and support security operations. Motorola Solutions also provides services such as system integration, maintenance and technical support.