Synacor (NASDAQ:SYNC) vs. Switch (NASDAQ:SWCH) Critical Contrast

Synacor (NASDAQ:SYNC) and Switch (NYSE:SWCH) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synacor $143.88 million 0.38 -$7.55 million N/A N/A
Switch $405.86 million 9.07 $4.05 million $0.09 166.89

Switch has higher revenue and earnings than Synacor.

Volatility and Risk

Synacor has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500. Comparatively, Switch has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Synacor and Switch, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synacor 0 3 0 0 2.00
Switch 0 2 6 0 2.75

Switch has a consensus price target of $12.94, indicating a potential downside of 13.46%. Given Switch’s stronger consensus rating and higher probable upside, analysts plainly believe Switch is more favorable than Synacor.

Profitability

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

Net Margins Return on Equity Return on Assets
Synacor -5.28% -10.63% -5.81%
Switch 1.05% 2.60% 1.24%

Dividends

Switch pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Synacor does not pay a dividend. 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.

Institutional and Insider Ownership

27.6% of Synacor shares are owned by institutional investors. Comparatively, 21.3% of Switch shares are owned by institutional investors. 25.3% of Synacor shares are owned by insiders. Comparatively, 28.4% of Switch shares are owned by 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.

Summary

Switch beats Synacor on 12 of the 14 factors compared between the two stocks.

Synacor Company Profile

Synacor, Inc. operates as a technology development, multiplatform services, and revenue partner for video, Internet, and communications providers; and device manufacturers, governments, and enterprises in the United States and internationally. It enables its customers to provide their consumers engaging, multiscreen experiences with products that require scale, and actionable data and implementation. The company, through its managed portals and advertising solutions, enables its customers to earn revenue by monetizing media among their consumers. It also offers recurring and fee-based revenue solutions, such as Cloud ID Authentication that offers home-based auto-authentication and social login, which enhances the consumer experience by reducing login failures; Email/Collaboration Services that include white-label hosting, security, and migration; and paid content and premium services. The company was formerly known as CKMP, Inc. and changed its name to Synacor, Inc. in July 2001. Synacor, Inc. was founded in 1998 and is headquartered in Buffalo, New York.

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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