Critical Analysis: Avaya (NYSE:AVYA) vs. Plantronics (NYSE:POLY)

Avaya (NYSE:AVYA) and Plantronics (NYSE:POLY) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

This table compares Avaya and Plantronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Avaya -0.54% 100.08% 4.04%
Plantronics -3.32% -107.89% 5.62%

Earnings & Valuation

This table compares Avaya and Plantronics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Avaya $2.87 billion 0.74 -$680.00 million $3.28 7.66
Plantronics $1.73 billion 0.88 -$57.33 million $3.17 11.35

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

Insider and Institutional Ownership

95.1% of Plantronics shares are held by institutional investors. 2.5% of Avaya shares are held by company insiders. Comparatively, 1.5% of Plantronics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Avaya and Plantronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Avaya 0 3 7 0 2.70
Plantronics 0 1 0 0 2.00

Avaya currently has a consensus target price of $29.00, indicating a potential upside of 15.35%. Plantronics has a consensus target price of $37.00, indicating a potential upside of 2.83%. Given Avaya’s stronger consensus rating and higher possible upside, research analysts plainly believe Avaya is more favorable than Plantronics.

Volatility & Risk

Avaya has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Plantronics has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500.

Summary

Avaya beats Plantronics on 8 of the 14 factors compared between the two stocks.

About Avaya

Avaya Holdings Corp., through its subsidiaries, provides digital communications products, solutions, and services for businesses worldwide. The company operates through two segments, Products & Solutions and Services. The Products & Solutions segment offers unified communications and contact center platforms, applications, and devices. This segments unified communications and collaboration solutions enable organizations to provide their workers with a single application, or app, for all-channel calling, messaging, meetings, and team collaboration with the same ease of use as existing consumer apps; and contact center solutions enable customers to build a customized portfolio of applications driving customer engagement and customer value. Its communications solutions include voice, email, chat, social media, video, performance management, and third-party integration. The Services segment provides global support services, enterprise cloud and managed services, and professional services. The company also provides business devices, such as IP-enabled handsets, multimedia devices, and video conferencing systems. Avaya Holdings Corp. sells directly through its sales force, as well as indirectly through its network of channel partners, including distributors, service providers, dealers, value-added resellers, system integrators, and business partners. The company has a strategic collaboration with RingCentral, Inc. to accelerate the company's transition to the cloud. The company is headquartered in Durham, North Carolina.

About Plantronics

Plantronics, Inc. designs, manufactures, markets, and sells integrated communications and collaborations solutions for corporate customers, small businesses, and individuals in the United States, Europe, the Middle East, Africa, the Asia Pacific, and rest of the Americas. Its principal product categories include headsets, which comprises wired and wireless communication headsets; voice that includes open session initiation protocol and native ecosystem desktop phones, and conference room phones; video conferencing solutions and peripherals, including cameras, speakers, and microphones designed to work with a range of unified communication and collaboration, unified communication as a service, and video as a service environments, including RealPresence collaboration solutions of infrastructure to endpoints that allows people to connect and collaborate; and content sharing solutions. The company also offers services that include video interoperability, and hardware and support for our solutions and hardware devices, as well as professional, hosted, and managed services; and cloud management and analytics software, which enables information technology administrators to configure and update firmware, monitor device usage, troubleshoot, and gain understanding of user behavior. It sells its products through value-added resellers, integrators, direct marketing resellers, service providers, direct and indirect resellers, network and systems integrators, enterprise distributors, wireless carriers, and mass merchants, as well as through both traditional and online retailers, and e-commerce channels under the Poly, Plantronics, and Polycom brands. Plantronics, Inc. was incorporated in 1961 and is headquartered in Santa Cruz, California.

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