Reviewing F5 (NASDAQ:FFIV) and ADTRAN (NASDAQ:ADTN)

F5 (NASDAQ:FFIV) and ADTRAN (NASDAQ:ADTN) are both technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Risk and Volatility

F5 has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Institutional and Insider Ownership

90.7% of F5 shares are owned by institutional investors. Comparatively, 80.6% of ADTRAN shares are owned by institutional investors. 0.5% of F5 shares are owned by company insiders. Comparatively, 2.2% of ADTRAN shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares F5 and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
F5	21.95%	21.54%	12.16%
ADTRAN	-2.29%	14.24%	1.66%

Analyst Recommendations

This is a summary of recent recommendations for F5 and ADTRAN, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F5	1	5	5	0	2.36
ADTRAN	2	1	4	0	2.29

F5 currently has a consensus target price of $416.62, suggesting a potential downside of 8.24%. ADTRAN has a consensus target price of $14.67, suggesting a potential upside of 108.33%. Given ADTRAN’s higher possible upside, analysts plainly believe ADTRAN is more favorable than F5.

Earnings & Valuation

This table compares F5 and ADTRAN”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F5	$3.31 billion	7.77	$692.38 million	$12.56	36.15
ADTRAN	$1.08 billion	0.53	-$45.66 million	($0.28)	-25.14

F5 has higher revenue and earnings than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than F5, indicating that it is currently the more affordable of the two stocks.

Summary

F5 beats ADTRAN on 11 of the 14 factors compared between the two stocks.

About F5

F5, Inc. provides multi-cloud application security and delivery solutions in the United States, Europe, the Middle East, Africa, and the Asia Pacific region. The company’s distributed cloud services enable its customers to deploy, secure, and operate applications in any architecture, from on-premises to the public cloud. It offers unified, security, networking, and application management solutions, such as web app and API protection; multi-cloud networking; application delivery and deployment; domain name system; content delivery network; and application deployment and orchestration. The company also provides application security and delivery products, including NGINX Plus; NGINX Management Suite; NGINX Ingress Controller; NGINX App Protect; BIG-IP Packaged Software; and BIG-IP Systems. In addition, it provides a range of professional services, including maintenance, consulting, training, and other technical support services. F5, Inc. sells its products to large enterprise businesses, public sector institutions, governments, and service providers through distributors, value-added resellers, managed service providers, systems integrators, and other indirect channel partners. It has partnerships with public cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. The company was formerly known as F5 Networks, Inc. and changed its name to F5, Inc. in November 2021. F5, Inc. was incorporated in 1996 and is headquartered in Seattle, Washington.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.