Head to Head Review: Instructure (INST) versus RingCentral (RNG)

Instructure (NYSE: INST) and RingCentral (NYSE:RNG) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Valuation & Earnings

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This table compares Instructure and RingCentral’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Instructure $158.81 million 9.16 -$49.82 million ($1.70) -25.65
RingCentral $501.53 million 10.56 -$26.14 million ($0.34) -197.94

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

Risk and Volatility

Instructure has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, RingCentral has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Instructure and RingCentral, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Instructure 0 1 7 0 2.88
RingCentral 0 3 11 0 2.79

Instructure presently has a consensus price target of $43.43, suggesting a potential downside of 0.39%. RingCentral has a consensus price target of $53.92, suggesting a potential downside of 19.88%. Given Instructure’s stronger consensus rating and higher possible upside, equities analysts plainly believe Instructure is more favorable than RingCentral.

Profitability

This table compares Instructure and RingCentral’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Instructure -31.37% -827.22% -41.80%
RingCentral -5.21% -16.54% -9.27%

Insider & Institutional Ownership

74.0% of Instructure shares are held by institutional investors. Comparatively, 75.8% of RingCentral shares are held by institutional investors. 62.5% of Instructure shares are held by insiders. Comparatively, 14.5% of RingCentral 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.

Summary

RingCentral beats Instructure on 9 of the 14 factors compared between the two stocks.

Instructure Company Profile

Instructure, Inc. provides cloud-based learning management platform for academic institutions and companies across the world. The Company operates in the cloud-based learning management systems segment. The Company builds its learning management applications, Canvas for the education market and Bridge for the corporate market, to enable its customers to develop, deliver and manage face-to-face and online learning experiences. The Company develops software that students, teachers and employees use to help achieve their education and learning goals. Its applications develop academic and corporate learning by providing a platform for instructors and learners, enabling frequent and open interactions, streamlining workflow, and allowing the creation and sharing of content. The Company’s platform runs on a cloud-based architecture that enables users to teach, learn and engage across a range of application environments, operating systems, devices and locations.

RingCentral Company Profile

RingCentral, Inc. provides software-as-a-service solutions for business communications and collaboration primarily in the United States. The company's products include RingCentral Office, a multi-tenant, multi-location, and enterprise-grade communications and collaboration solution that enables employees to communicate through voice, text, team messaging and collaboration, and HD video and Web conferencing through smartphones, tablets, PCs, and desk phones for businesses, which require a communications solution; RingCentral Professional, an inbound call routing subscription with additional text and fax capabilities primarily for smaller businesses; and RingCentral Fax solution that offers Internet fax capabilities, which allow businesses to send and receive fax documents without the need for a fax machine. Its products also comprise RingCentral Contact Center that provides a cloud based contact center solution, which delivers omni-channel capabilities; and RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office. RingCentral, Inc. serves a range of industries, including financial services, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. The company sells its products through a network of direct sales representatives, as well as sales agents and channel partners. RingCentral, Inc. was founded in 1999 and is headquartered in Belmont, California.

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