Critical Review: RealNetworks (RNWK) and Innovative Solutions & Support (ISSC)

RealNetworks (NASDAQ:RNWK) and Innovative Solutions & Support (NASDAQ:ISSC) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares RealNetworks and Innovative Solutions & Support’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RealNetworks -24.01% -30.83% -21.89%
Innovative Solutions & Support -23.74% -9.48% -8.68%

Risk and Volatility

RealNetworks has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Innovative Solutions & Support has a beta of -0.12, meaning that its stock price is 112% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for RealNetworks and Innovative Solutions & Support, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealNetworks 0 0 0 0 N/A
Innovative Solutions & Support 0 0 0 0 N/A

Insider & Institutional Ownership

50.2% of RealNetworks shares are held by institutional investors. Comparatively, 25.8% of Innovative Solutions & Support shares are held by institutional investors. 39.5% of RealNetworks shares are held by company insiders. Comparatively, 27.7% of Innovative Solutions & Support shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares RealNetworks and Innovative Solutions & Support’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RealNetworks $78.72 million 1.08 -$16.30 million N/A N/A
Innovative Solutions & Support $16.79 million 2.08 $4.56 million N/A N/A

Innovative Solutions & Support has lower revenue, but higher earnings than RealNetworks.

Summary

Innovative Solutions & Support beats RealNetworks on 5 of the 9 factors compared between the two stocks.

RealNetworks Company Profile

RealNetworks, Inc. provides network-delivered digital media applications and services to manage, play, and share digital media. Its Consumer Media segment offers RealPlayer media player software, which enables 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. This segment also licenses its technology to electronic equipment, microchip, and integrated circuit manufacturers. The company's Mobile Services segment provides digital media services to mobile and online service providers as software as a service offerings, which include RealTimes, a photo and video sharing platform, offers to wireless carriers for integration in their hosted cloud solutions; Kontxt, a text message management, anti-spam, and classification product; ringback tone that enables callers to hear subscriber-selected music or messages instead of the traditional electronic ringing; intercarrier messaging services; and business intelligence, and subscriber management and billing for the carriers. Its Games segment develops, publishes, and distributes casual games, including time-management, board, card, puzzle, word, and hidden-object games. It offers its casual games through mobile devices, digital downloads, and subscription play. The company also develops and markets software products and services that enable the creation, distribution, and consumption of digital media, including audio and video. The company provides its products and services through direct and indirect channels comprising public relations, trade shows, events, and speaking opportunities; online channels; third party distribution partners; and third-party distribution channels, such as application storefronts, search engines, online portals, and content publishers. RealNetworks, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

Innovative Solutions & Support Company Profile

Innovative Solutions and Support, Inc., a systems integrator, designs, manufactures, sells, and services flight guidance and cockpit display systems. It offers flat panel display systems that could replicate the display of analog or digital displays on one screen and could replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; flight management systems that complement the IS&S flat panel display system upgrade for commercial air transport aircraft; and integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single standby/backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. The company also provides digital air data computers, which calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information derived from the measure of air pressure; integrated air data computers and display units that calculate and convey air data information; altitude displays, which convey aircraft altitude measurements; airspeed displays, which convey various types of airspeed measurements; and altitude alerters that allow pilots to select a desired cruising altitude and provide warnings to pilots when an unacceptable deviation occurs. In addition, it offers engine and fuel displays that convey information related to fuel and oil levels, and engine activity, such as oil and hydraulic pressure and temperature; integrated global navigation systems; and utilities management systems. The company serves commercial air transport carriers and corporate/general aviation companies, Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, foreign militaries, and original equipment manufacturers. The company was founded in 1988 and is based in Exton, Pennsylvania.

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