Contrasting Parsons (NYSE:PSN) and Ribbon Communications (NYSE:RBBN)

Parsons (NYSE:PSN) and Ribbon Communications (NASDAQ:RBBN) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Parsons and Ribbon Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parsons 1 3 4 0 2.38
Ribbon Communications 0 2 0 0 2.00

Parsons currently has a consensus price target of $41.00, indicating a potential downside of 7.62%. Ribbon Communications has a consensus price target of $4.75, indicating a potential upside of 51.27%. Given Ribbon Communications’ higher probable upside, analysts clearly believe Ribbon Communications is more favorable than Parsons.

Valuation and Earnings

This table compares Parsons and Ribbon Communications’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Parsons $3.56 billion 1.24 $222.34 million N/A N/A
Ribbon Communications $577.91 million 0.60 -$76.81 million $0.48 6.54

Parsons has higher revenue and earnings than Ribbon Communications.

Profitability

This table compares Parsons and Ribbon Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parsons 2.97% -11.53% 3.87%
Ribbon Communications 3.25% 5.02% 3.18%

Insider and Institutional Ownership

80.6% of Ribbon Communications shares are held by institutional investors. 1.7% of Ribbon Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Parsons beats Ribbon Communications on 6 of the 11 factors compared between the two stocks.

Parsons Company Profile

Parsons Corporation provides technology based solutions in the defense, intelligence, and critical infrastructure markets in North America, the Middle East, and internationally. It operates in two segments, Federal Solutions and Critical Infrastructure. The company offers cybersecurity software and engineering services, hardware prototyping, and other technical services to the U.S. Army and the United States intelligence community; ThunderRidge, a tool that assists cyber operational users to develop action plans, assess cyber threats, and disseminate situational awareness in real-time; and geospatial intelligence, big data analytics, and threat mitigation technology services to the defense, intelligence, space and command, control, communications, computer, cyber, intelligence, surveillance, and reconnaissance. It also provides mission planning for space situational awareness, small satellite systems integration, electronic warfare, directed energy modeling and simulation, and command and control systems and support to the Missile Defense Agency, the U.S. Air Force, and the U.S. Army; converged cyber-physical solutions for critical infrastructure, and global military mission readiness and training services to the Federal Aviation Administration and the U.S. Army; and technology services for advanced energy production systems, healthcare systems, environmental systems, and related infrastructure. In addition, the company offers intelligent transportation system management, train controls integration, smart cities software, and critical infrastructure cyber protection to the transportation authorities, rail, and transit entities; engineering services for complex infrastructure, including bridges and tunnels, roads and highways, airports, and rail and transit; and engineering, program management, and environmental solutions to private-sector industrial clients and public utilities. Parsons Corporation was founded in 1944 and is headquartered in Centreville, Virginia.

Ribbon Communications Company Profile

Ribbon Communications Inc. provides networked solutions in the United States, Europe, the Middle East, Africa, Japan, other Asia Pacific, and internationally. The company offers service provider solutions, such as fixed network transformation, mobile network evolution, secure network interconnects, network functions virtualization, cloud communications, and communications security solutions that enables secure and innovative business and consumer communications services. Its enterprise solutions include unified communications (UC), Nortel private branch exchange evolution, UC security, contact centers, Microsoft Skype for Business, session management, and security and cloud communications solutions that allows enterprises to connect securely to SIP trunks and modernize communications networks. The company also offers solution and business consulting, system integration, deployment, and managed care services; and support services, such as managing software updates, appliance maintenance, appliance spare services and managed spares programs, and emergency assistance during disaster recovery. It serves telecommunications, wireless and cable service providers, and enterprises through direct sales and indirect channels. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Westford, Massachusetts.

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