Comparing Red Hat (RHT) and Internap (INAP)

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Red Hat (NYSE:RHT) and Internap (NASDAQ:INAP) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Red Hat and Internap, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat 1 15 13 0 2.41
Internap 0 1 4 0 2.80

Red Hat currently has a consensus target price of $164.30, suggesting a potential downside of 5.63%. Internap has a consensus target price of $14.70, suggesting a potential upside of 178.41%. Given Internap’s stronger consensus rating and higher possible upside, analysts clearly believe Internap is more favorable than Red Hat.

Profitability

This table compares Red Hat and Internap’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Hat 8.66% 33.96% 9.27%
Internap -16.18% -2,471.65% -7.11%

Valuation and Earnings

This table compares Red Hat and Internap’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Hat $2.92 billion 10.54 $258.80 million $2.30 75.70
Internap $280.72 million 0.48 -$45.34 million ($1.55) -3.41

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

Insider & Institutional Ownership

96.4% of Red Hat shares are owned by institutional investors. Comparatively, 68.6% of Internap shares are owned by institutional investors. 0.6% of Red Hat shares are owned by insiders. Comparatively, 5.9% of Internap shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Red Hat has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Internap has a beta of 2.53, suggesting that its share price is 153% more volatile than the S&P 500.

Summary

Red Hat beats Internap on 10 of the 14 factors compared between the two stocks.

Red Hat Company Profile

Red Hat, Inc. provides open source software solutions to develop and offer operating system, virtualization, management, middleware, cloud, mobile, and storage technologies to various enterprises worldwide. It offers infrastructure-related solutions, such as Red Hat Enterprise Linux, an operating system platform that runs on hardware for use in hybrid cloud environments; Red Hat Satellite, a system management offering that helps to deploy, scale, and manage in hybrid cloud environments; and Red Hat Enterprise Virtualization, a software solution that allows customers to utilize and manage a common hardware infrastructure to run multiple operating systems and applications. The company offers application development-related and other technology solutions, such as Red Hat JBoss Middleware, a solution for developing, deploying, and managing applications; integrating applications, data, and devices; and automating business processes in hybrid cloud environments; The company's application development-related and other technology solutions also includes Red Hat cloud offerings, a software solution that enables customers to build and manage various cloud computing environments; Red Hat Mobile, a software development platform that enables customers to develop, integrate, deploy, and manage mobile applications for enterprises; and Red Hat Storage, a software solution that enables customers to manage large, unstructured, or semi-structured data in hybrid cloud environments. It also provides consulting, support, and training services; and realtime operating system, distributed computing, directory services, and user authentication. Red Hat, Inc. has collaboration with Juniper Networks Expand to provide a unified solution for enterprises designed to manage and run applications and services. The company was formerly known as Red Hat Software, Inc. and changed its name to Red Hat, Inc. in June 1999. Red Hat, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

Internap Company Profile

Internap Corporation provides Internet infrastructure services. It operates through two business segments, INAP COLO and INAP CLOUD. The INAP COLO segment offers colocation services, including physical space within data centers and related services, such as power, interconnection, environmental controls, monitoring, and security; and Internet protocol (IP) connectivity services comprising its patented Performance IP and content delivery network services, IP routing hardware and software platforms, and Managed Internet Route Optimizer controllers. This segment offers its colocation services through 56 data centers and 97 points of presence worldwide. The INAP CLOUD segment provides hosted Infrastructure-as-a-Service as a cloud platform or through managed hosting that includes the provision and maintenance of hardware, data center infrastructure, and interconnection that enables its customers to own and manage their software applications and content. This segment offers cloud and managed hosting services, which comprise compute and storage services, as well as a single tenant infrastructure environment through an integrated platform that includes servers, storage, and network. The company serves various industries, including healthcare; advertising technology; financial; technology infrastructure; and gaming and software. The company was formerly known as Internap Network Services Corporation and changed its name to Internap Corporation in November 2014. Internap Corporation was founded in 1996 and is headquartered in Reston, Virginia.

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