RealNetworks (RNWK) and Nuance Communications (NUAN) Head to Head Survey

RealNetworks (NASDAQ: RNWK) and Nuance Communications (NASDAQ:NUAN) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

51.9% of RealNetworks shares are held by institutional investors. Comparatively, 84.9% of Nuance Communications shares are held by institutional investors. 37.9% of RealNetworks shares are held by insiders. Comparatively, 1.7% of Nuance Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares RealNetworks and Nuance Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RealNetworks $120.47 million 1.01 -$36.55 million ($0.73) -4.48
Nuance Communications $1.98 billion 2.51 -$150.99 million ($0.52) -32.90

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for RealNetworks and Nuance Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealNetworks 0 0 1 0 3.00
Nuance Communications 0 1 6 1 3.00

RealNetworks presently has a consensus target price of $6.50, indicating a potential upside of 98.78%. Nuance Communications has a consensus target price of $20.86, indicating a potential upside of 21.90%. Given RealNetworks’ higher probable upside, equities analysts plainly believe RealNetworks is more favorable than Nuance Communications.

Profitability

This table compares RealNetworks and Nuance Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RealNetworks -21.67% -32.64% -21.89%
Nuance Communications -7.75% 12.15% 3.94%

Volatility and Risk

RealNetworks has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, Nuance Communications has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Summary

Nuance Communications beats RealNetworks on 10 of the 14 factors compared between the two stocks.

About RealNetworks

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

About Nuance Communications

Nuance Communications, Inc. is a provider of voice recognition and natural language understanding solutions. The Company’s segments include Healthcare, Mobile, Enterprise and Imaging. The Healthcare segment provides clinical speech and clinical language understanding solutions. The solutions for the Healthcare segment include transcription solutions, Dragon Medical, and clinical document improvement (CDI) and coding solutions. Its Mobile segment provides a portfolio of specialized virtual assistants and connected services. The Enterprise segment provides automated customer solutions and services. The solutions for the Enterprise segment include On-Premise solutions and services, and On-Demand multichannel cloud. The Imaging segment provides software solutions that help professionals and organizations to gain control of their document and information processes. Imaging segment include multi-function printer (MFP) scan automation solutions and MFP Print automation solutions.

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