Financial Comparison: ORBCOMM (ORBC) & T-Mobile US (TMUS)

ORBCOMM (NASDAQ: ORBC) and T-Mobile US (NASDAQ:TMUS) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Volatility & Risk

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ORBCOMM has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, T-Mobile US has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.

Profitability

This table compares ORBCOMM and T-Mobile US’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ORBCOMM -24.11% -10.07% -4.61%
T-Mobile US 11.19% 9.60% 2.86%

Institutional & Insider Ownership

75.3% of ORBCOMM shares are owned by institutional investors. Comparatively, 35.7% of T-Mobile US shares are owned by institutional investors. 7.8% of ORBCOMM shares are owned by insiders. Comparatively, 0.3% of T-Mobile US 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.

Valuation & Earnings

This table compares ORBCOMM and T-Mobile US’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ORBCOMM $254.22 million 2.76 -$61.28 million ($0.84) -11.15
T-Mobile US $40.60 billion 1.28 $4.54 billion $2.29 26.66

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

Analyst Recommendations

This is a summary of recent ratings and price targets for ORBCOMM and T-Mobile US, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ORBCOMM 0 0 6 0 3.00
T-Mobile US 1 4 19 3 2.89

ORBCOMM presently has a consensus price target of $14.00, indicating a potential upside of 49.41%. T-Mobile US has a consensus price target of $70.93, indicating a potential upside of 16.21%. Given ORBCOMM’s stronger consensus rating and higher possible upside, equities analysts plainly believe ORBCOMM is more favorable than T-Mobile US.

Summary

T-Mobile US beats ORBCOMM on 8 of the 14 factors compared between the two stocks.

ORBCOMM Company Profile

ORBCOMM Inc. is a provider of Internet of Things (IoT) solutions, including network connectivity, devices, device management and Web reporting applications. The Company’s IoT products and services are designed to track, monitor and manage security for a range of assets, such as trailers, trucks, rail cars, sea containers, generators, fluid tanks, marine vessels, diesel or electric powered generators (gensets), oil and gas wells, pipeline monitoring equipment, irrigation control systems, and utility meters, in industries for transportation and supply chain, heavy equipment, fixed asset monitoring, maritime and government. It also provides Automatic Identification System (AIS) data services to assist in vessel navigation and to manage maritime safety for government and commercial customers across the world. It provides its services using various network platforms, including its own constellation of low-Earth orbit (LEO) satellites.

T-Mobile US Company Profile

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to 72.6 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, tablets, and other mobile communication devices, as well as accessories that are manufactured by various suppliers. In addition, the company offers services, devices, and accessories under the T-Mobile and MetroPCS brands through its owned and operated retail stores, third party distributors, and its Websites. It also sells its devices to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party Websites. As of December 31, 2017, T-Mobile US, Inc. operated approximately 2,200 T-Mobile and MetroPCS retail locations, including stores and kiosks. The company was founded in 1994 and is headquartered in Bellevue, Washington. T-Mobile US, Inc. is a subsidiary of Deutsche Telekom AG.

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