Head-To-Head Contrast: Rapid7 (RPD) versus Trend Micro (TMICY)
Rapid7 (NASDAQ:RPD) and Trend Micro (OTCMKTS:TMICY) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.
Institutional & Insider Ownership
85.1% of Rapid7 shares are owned by institutional investors. Comparatively, 0.2% of Trend Micro shares are owned by institutional investors. 4.9% of Rapid7 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and target prices for Rapid7 and Trend Micro, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rapid7 currently has a consensus target price of $54.43, suggesting a potential upside of 2.48%. Given Rapid7’s higher possible upside, equities analysts plainly believe Rapid7 is more favorable than Trend Micro.
Trend Micro pays an annual dividend of $2.46 per share and has a dividend yield of 5.3%. Rapid7 does not pay a dividend. Trend Micro pays out 133.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares Rapid7 and Trend Micro’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Rapid7||$244.09 million||10.49||-$55.54 million||($1.01)||-52.58|
|Trend Micro||$1.45 billion||4.49||$257.66 million||$1.84||25.26|
Trend Micro has higher revenue and earnings than Rapid7. Rapid7 is trading at a lower price-to-earnings ratio than Trend Micro, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Rapid7 has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Trend Micro has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.
This table compares Rapid7 and Trend Micro’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Rapid7, Inc. provides analytics solutions for security and information (IT) operations. Its vulnerability management solutions include InsightVM and Nexpose, which enable customers to assess and remediate their overall exposure to cyber risk; InsightAppSec, an insight platform based solution; AppSpider, an application security testing solution; and Metasploit, a penetration testing software solution. The company's incident detection and response solutions comprise InsightIDR; Managed Detection and Response, an outsourced service; and incident response services that offer customers with access to security experts and experience. In addition, it provides Logentries for cyber security; InsightOps, which simplifies IT infrastructure monitoring and troubleshooting by centralizing data from customers' network into a secure location; and Komand software. Further, the company provides consulting services in the areas of cyber security maturity assessment, incident response program development, penetration testing, security program development, Virtual CISO, IoT security, and threat modeling services. It offers its products through a combination of perpetual and term software licenses, cloud-based subscriptions, and managed services. The company serves clients in technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Rapid7, Inc. was incorporated in 2000 and is headquartered in Boston, Massachusetts.
About Trend Micro
Trend Micro Incorporated develops and sells security solutions primarily in Japan. The company offers hybrid cloud security solutions, such as data center, cloud, and virtualization security products; network security solutions, including integrated advanced threat prevention and advanced threat detection solutions; user protection solutions comprising endpoint and gateway suites, endpoint security, email security, Web security, SaaS application security, and endpoint detection and response; and support services. It serves finance, insurance, and retail industries, as well as government institutions. Trend Micro Incorporated has a partnership with Moxa Inc. to develop solutions to protect industrial Internet of Things environments; and strategic partnership with Luxoft Holding, Inc. to offer intrusion detection systems and intrusion prevention systems to detect, mitigate, and respond to cyber-attacks on connected cars. The company was founded in 1988 and is headquartered in Tokyo, Japan.
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