Ooma vs RingCentral Which Should You Buy?

Ooma Inc. and RingCentral Inc. are two prominent players in the telecommunications industry, offering cloud-based communication solutions for businesses of all sizes. Both companies have seen significant growth in recent years as businesses increasingly rely on digital communication tools. However, there are key differences between Ooma and RingCentral that investors should consider when deciding where to put their money. In this comparison, we will analyze the performance, growth prospects, and overall value of Ooma vs RingCentral stocks.

Ooma or RingCentral?

When comparing Ooma and RingCentral, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Ooma and RingCentral.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Ooma has a dividend yield of -%, while RingCentral has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Ooma reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, RingCentral reports a 5-year dividend growth of 0.00% year and a payout ratio of -29.56%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Ooma P/E ratio at -71.59 and RingCentral's P/E ratio at -34.09. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Ooma P/B ratio is 4.42 while RingCentral's P/B ratio is -9.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Ooma has seen a 5-year revenue growth of 0.43%, while RingCentral's is 1.74%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Ooma's ROE at -6.35% and RingCentral's ROE at 20.71%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $13.34 for Ooma and $36.00 for RingCentral. Over the past year, Ooma's prices ranged from $6.50 to $13.74, with a yearly change of 111.38%. RingCentral's prices fluctuated between $26.27 and $40.98, with a yearly change of 56.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.