SolarWinds (NYSE:SWI) versus The Competition Critical Survey

SolarWinds (NYSE: SWI) is one of 103 publicly-traded companies in the “Enterprise Software” industry, but how does it compare to its rivals? We will compare SolarWinds to related businesses based on the strength of its institutional ownership, analyst recommendations, profitability, dividends, valuation, risk and earnings.

Insider & Institutional Ownership

59.8% of shares of all “Enterprise Software” companies are owned by institutional investors. 23.2% of shares of all “Enterprise Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for SolarWinds and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarWinds 0 0 0 0 N/A
SolarWinds Competitors 379 2224 4171 121 2.59

As a group, “Enterprise Software” companies have a potential upside of 6.03%. Given SolarWinds’ rivals higher possible upside, analysts clearly believe SolarWinds has less favorable growth aspects than its rivals.

Profitability

This table compares SolarWinds and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SolarWinds 20.52% 19.24% 12.70%
SolarWinds Competitors -22.15% -210.23% -6.99%

Volatility & Risk

SolarWinds has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, SolarWinds’ rivals have a beta of 1.04, meaning that their average stock price is 4% more volatile than the S&P 500.

Valuation and Earnings

This table compares SolarWinds and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
SolarWinds N/A N/A 50.83
SolarWinds Competitors $1.76 billion $288.64 million 48.79

SolarWinds’ rivals have higher revenue and earnings than SolarWinds. SolarWinds is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

About SolarWinds

SolarWinds, Inc. (SolarWinds) is a holding company. The Company designs, develops, markets, sells and supports enterprise-class information technology (IT), infrastructure management software to IT and DevOps professionals in organizations of all sizes. Its products categories include network management, which is used to monitor and manage the performance of network infrastructure; systems management, which is used to monitor and manage the performance of applications, physical and virtual servers, storage and databases; MSP, which is used by managed service providers to monitor and manage the IT infrastructure of their end clients, SMBs, and cloud, its cloud-based products, which are used to monitor and manage applications and application infrastructure. Its customers include small- and mid-size businesses, enterprises, MSPs, and local, state and federal Government entities.

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