Critical Contrast: Sprint Corporation (S) vs. Meru Networks (MERU)

Meru Networks (NASDAQ: MERU) and Sprint Corporation (NYSE:S) are both telecommunications services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitabiliy.

Valuation and Earnings

This table compares Meru Networks and Sprint Corporation’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Meru Networks	N/A	N/A	N/A	N/A	N/A
Sprint Corporation	$33.35 billion	0.98	$10.42 billion	($0.31)	-26.45

Sprint Corporation has higher revenue and earnings than Meru Networks.

Analyst Ratings

This is a breakdown of recent ratings for Meru Networks and Sprint Corporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meru Networks	0	0	0	0	N/A
Sprint Corporation	6	10	3	0	1.84

Sprint Corporation has a consensus price target of $9.54, suggesting a potential upside of 16.28%. Given Sprint Corporation’s higher possible upside, analysts clearly believe Sprint Corporation is more favorable than Meru Networks.

Profitability

This table compares Meru Networks and Sprint Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meru Networks	-46.15%	N/A	-86.56%
Sprint Corporation	-3.62%	-5.90%	-1.38%

Insider & Institutional Ownership

14.3% of Sprint Corporation shares are owned by institutional investors. 0.2% of Sprint Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Sprint Corporation beats Meru Networks on 7 of the 8 factors compared between the two stocks.

Meru Networks Company Profile

Meru Networks, Inc. (Meru) develops and markets a virtualized Wireless Local Area Network (WLAN) solution. The Company’s solution is built around its System Director Operating System, which runs on its controllers and access points. The Company offers additional products designed to deliver network management, diagnostics and security. The Company also offers support services related to its products, professional services, and training. Its products and services are sold through value added resellers, and distributors, as well as its sales force. Its System Director Operating System forms the core of its virtualized WLAN solution. It provides a family of controllers that run its System Director Operating System and work in conjunction with its access points. Its Wireless Fidelity (Wi-Fi) certified access points provide network connectivity for wireless devices. Its bring-your-own-device (BYOD) and policy management solutions are designed to automate secure guest access.

Sprint Corporation Company Profile

Sprint Corporation (Sprint) is a holding company. The Company, along with its subsidiaries, is a communications company offering a range of wireless and wireline communications products and services that are designed to meet the needs of consumers, businesses, government subscribers and resellers. It operates through two segments: Wireless and Wireline. The Company offers wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale basis. The Wireline segment provides voice, data and Internet Protocol (IP) communication services to its Wireless segment. The Company offers wireless and wireline services to subscribers in approximately 50 states, Puerto Rico, and the United States Virgin Islands under the Sprint corporate brand, which includes its retail brands of Sprint, Boost Mobile, Virgin Mobile and Assurance Wireless on its wireless networks utilizing various technologies.