Critical Comparison: AppLovin (NASDAQ:APP) and Virnetx (NASDAQ:VHC)

AppLovin (NASDAQ:APP) and Virnetx (NASDAQ:VHC) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Volatility and Risk

AppLovin has a beta of 2.56, meaning that its share price is 156% more volatile than the S&P 500. Comparatively, Virnetx has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for AppLovin and Virnetx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppLovin	0	8	17	3	2.82
Virnetx	1	0	0	0	1.00

AppLovin presently has a consensus price target of $519.71, indicating a potential upside of 87.60%. Given AppLovin’s stronger consensus rating and higher possible upside, research analysts clearly believe AppLovin is more favorable than Virnetx.

Valuation & Earnings

This table compares AppLovin and Virnetx”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppLovin	$5.48 billion	16.92	$3.33 billion	$13.01	21.29
Virnetx	$160,000.00	301.88	-$18.23 million	($5.37)	-2.14

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

Institutional and Insider Ownership

41.9% of AppLovin shares are held by institutional investors. Comparatively, 10.4% of Virnetx shares are held by institutional investors. 12.8% of AppLovin shares are held by company insiders. Comparatively, 15.7% of Virnetx shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares AppLovin and Virnetx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AppLovin	64.58%	193.10%	59.63%
Virnetx	N/A	-92.46%	-66.74%

Summary

AppLovin beats Virnetx on 13 of the 15 factors compared between the two stocks.

About AppLovin

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products. It also offers SparkLabs, which uses app store optimization to enhance ad visibility; AppLovin Exchange, which connects buyers to mobile and CTV devices through a single and direct RTB exchange; and Array, an end-to-end app management suite for mobile operators and end users. In addition, the company operates various free-to-play mobile games. It serves individuals, small and independent businesses, enterprises, advertisers and advertising networks, mobile app publishers, indie studio developers, and internet platforms. AppLovin Corporation was incorporated in 2011 and is headquartered in Palo Alto, California.

About Virnetx

VirnetX Holding Corporation, through its subsidiary VirnetX, Inc., operates as an Internet security software and technology company primarily in the United States. The company develops software and technology solutions, including secure domain name registry and GABRIEL Connection Technology that are designed to secure communications over the Internet using zero trust network access. It also offers a portfolio of licenses and services, such as VirnetX One, a security-as-a-service platform that protects enterprise applications, services, and infrastructure from cyber-attacks; GABRIEL Connection Technology software development kit to assist with rapid integration of its techniques into existing software implementations; and War Room software that offers safe and secure video conferencing meeting environment where sensitive communications and data is invisible to those not authorized to view it. In addition, the company provides GABRIEL Collaboration Suite that enables seamless and secure cross-platform communications between users’ devices. It serves domain infrastructure and communication service providers, and system integrators; and enterprise customers, developers, and original equipment manufacturers of chips, servers, desktops, smart phones, tablets, laptops, net books, and other devices in the IP-telephony, mobility, fixed-mobile convergence, and unified communications markets. The company was incorporated in 2005 and is headquartered in Zephyr Cove, Nevada.