Critical Comparison: SeaChange International (NASDAQ:SEAC) and QUALCOMM (NASDAQ:QCOM)

QUALCOMM (NASDAQ:QCOM) and SeaChange International (NASDAQ:SEAC) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Volatility & Risk

QUALCOMM has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, SeaChange International has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares QUALCOMM and SeaChange International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QUALCOMM 17.31% 66.54% 9.29%
SeaChange International -43.99% -6.87% -4.63%

Analyst Ratings

This is a breakdown of recent recommendations for QUALCOMM and SeaChange International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QUALCOMM 2 8 16 1 2.59
SeaChange International 0 0 1 0 3.00

QUALCOMM presently has a consensus target price of $91.33, suggesting a potential upside of 32.40%. Given QUALCOMM’s higher probable upside, equities research analysts plainly believe QUALCOMM is more favorable than SeaChange International.

Institutional and Insider Ownership

77.1% of QUALCOMM shares are owned by institutional investors. Comparatively, 34.2% of SeaChange International shares are owned by institutional investors. 0.1% of QUALCOMM shares are owned by insiders. Comparatively, 2.9% of SeaChange International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares QUALCOMM and SeaChange International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QUALCOMM $24.27 billion 3.25 $4.39 billion $2.84 24.29
SeaChange International $62.40 million 2.04 -$38.00 million ($0.39) -8.85

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

Summary

QUALCOMM beats SeaChange International on 13 of the 15 factors compared between the two stocks.

About QUALCOMM

QUALCOMM Incorporated designs, develops, manufactures, and markets digital communication products worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on code division multiple access (CDMA), orthogonal frequency division multiple access, and other technologies for use in wireless voice and data communications, networking, application processing, multimedia, and global positioning system products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, wideband CDMA, CDMA time division duplex, long term evolution, and/or fifth generation standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including automotive, Internet of things, mobile, data center, and healthcare for supporting the design and introduction of new products and services for voice and data communications, and new industry segments. The company also provides products and services for mobile health; products designed for the implementation of small cells; development, and other services and related products to the United States government agencies and their contractors; and software products, and content and push-to-talk enablement services to wireless operators. In addition, it licenses chipset technology, and products and services for use in data centers. QUALCOMM Incorporated was founded in 1985 and is headquartered in San Diego, California.

About SeaChange International

SeaChange International, Inc. provides multiscreen, advertising, and premium over the top (OTT) video products and services that facilitate the aggregation, licensing, management, and distribution of video and television advertising content worldwide. It offers video products, including SeaChange Adrenalin, a multiscreen video back office platform that enables service providers to manage, monetize, and deliver a seamless viewing experience across televisions, personal computers (PCs), tablets, smartphones, and other IP-enabled devices; and SeaChange AssetFlow, a content management solution, which is used to receive, manage, and publish content for viewing on televisions, tablets, PCs, and other consumer devices, as well as SeaChange Rave, an integrated platform. The company also provides advertising products, such as SeaChange Infusion, an advertising platform to maximize advertising revenue across multiscreen, broadcast, on-demand, and OTT viewing. In addition, it offers Nucleus, a video gateway software that ports to third-party set-top boxes, or other customer on-premises equipment hardware and system on a chip, as well as acts as a hub for various video distribution to any IP-connected device throughout the home, such as tablets, smart phones, and game consoles; and SeaChange NitroX, an user experience product that empower service providers and content owners to optimize live and on-demand video consumption on multiscreen and OTT services. Further, the company provides professional, and maintenance and support services, as well as managed services. It sells and markets its products and services through a direct sales organization, and sales representatives and partners, as well as to systems integrators and value-added resellers. The company serves cable system and satellite operators, as well as telecommunications and media companies. SeaChange International, Inc. was founded in 1993 and is headquartered in Acton, Massachusetts.

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