Critical Contrast: RingCentral (NYSE:RNG) & CSG Systems International (NYSE:CSGS)

RingCentral (NYSE:RNG) and CSG Systems International (NASDAQ:CSGS) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations for RingCentral and CSG Systems International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RingCentral 0 3 15 1 2.89
CSG Systems International 0 1 1 0 2.50

RingCentral currently has a consensus target price of $171.89, suggesting a potential downside of 13.03%. CSG Systems International has a consensus target price of $58.00, suggesting a potential upside of 12.27%. Given CSG Systems International’s higher possible upside, analysts plainly believe CSG Systems International is more favorable than RingCentral.

Profitability

This table compares RingCentral and CSG Systems International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RingCentral -4.06% -1.61% -0.56%
CSG Systems International 8.20% 26.74% 8.54%

Risk and Volatility

RingCentral has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, CSG Systems International has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RingCentral $673.62 million 24.63 -$26.20 million ($0.04) -4,941.25
CSG Systems International $875.06 million 1.95 $66.13 million $2.61 19.79

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

Insider and Institutional Ownership

83.0% of RingCentral shares are held by institutional investors. Comparatively, 96.4% of CSG Systems International shares are held by institutional investors. 11.0% of RingCentral shares are held by insiders. Comparatively, 1.9% of CSG Systems International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

CSG Systems International beats RingCentral on 10 of the 15 factors compared between the two stocks.

RingCentral Company Profile

RingCentral, Inc. provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect primarily in North America. The company's products include RingCentral Office, provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax through smartphones, tablets, PCs, and desk phones; RingCentral Professional, a cloud based virtual telephone service for professionals, as well as provides inbound call answering and management services, and includes inbound local, long-distance, and toll-free minutes; and RingCentral Fax that provides online fax capabilities that allow businesses to send and receive fax documents without a fax machine. Its products also comprise RingCentral Contact Center, a collaborative contact center solution that delivers omni-channel; 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. The company 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. It sells its products through a network of direct sales representatives, as well as sales agents and channel partners. The company was incorporated in 1999 and is headquartered in Belmont, California.

CSG Systems International Company Profile

CSG Systems International, Inc. provides business support solutions primarily to the communications industry in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers revenue management and digital monetization solutions, including Advanced Convergent Platform, a pre-integrated hybrid cloud-based platform; and Ascendon, Singleview, Total Service Mediation, and Wholesale Business Management Solution platforms. It also provides customer communications management solutions, such as field force automation, analytics, electronic bill presentment, ACH, etc. for processing voice, SMS/text, print, and email messages; and payment solutions, such as cloud-based integrated suite of products and solutions. In addition, the company offers managed services; and professional services to implement, configure, and maintain its products, as well as licenses products, such as mediation, partner management, rating, and charging. It serves the media, entertainment, government, insurance, and health care industries. The company was founded in 1994 and is headquartered in Greenwood Village, Colorado.

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