Nuance Communications (NASDAQ: NUAN) and Callidus Software (NASDAQ:CALD) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Nuance Communications and Callidus Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nuance Communications 0 1 6 1 3.00
Callidus Software 0 1 9 0 2.90

Nuance Communications currently has a consensus target price of $20.86, indicating a potential upside of 22.91%. Callidus Software has a consensus target price of $30.11, indicating a potential upside of 1.21%. Given Nuance Communications’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Nuance Communications is more favorable than Callidus Software.

Insider and Institutional Ownership

85.0% of Nuance Communications shares are held by institutional investors. Comparatively, 92.1% of Callidus Software shares are held by institutional investors. 1.7% of Nuance Communications shares are held by company insiders. Comparatively, 1.6% of Callidus Software shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Nuance Communications and Callidus Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nuance Communications -7.75% 12.15% 3.94%
Callidus Software -9.54% -5.67% -3.39%

Volatility and Risk

Nuance Communications has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Callidus Software has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Valuation & Earnings

This table compares Nuance Communications and Callidus Software’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nuance Communications $1.98 billion 2.49 -$150.99 million ($0.53) -32.02
Callidus Software $206.72 million 9.80 -$18.96 million ($0.36) -82.64

Callidus Software has lower revenue, but higher earnings than Nuance Communications. Callidus Software is trading at a lower price-to-earnings ratio than Nuance Communications, indicating that it is currently the more affordable of the two stocks.

Summary

Nuance Communications beats Callidus Software on 9 of the 15 factors compared between the two stocks.

Nuance Communications Company Profile

Nuance Communications, Inc. is a provider of voice recognition and natural language understanding solutions. The Company’s segments include Healthcare, Mobile, Enterprise and Imaging. The Healthcare segment provides clinical speech and clinical language understanding solutions. The solutions for the Healthcare segment include transcription solutions, Dragon Medical, and clinical document improvement (CDI) and coding solutions. Its Mobile segment provides a portfolio of specialized virtual assistants and connected services. The Enterprise segment provides automated customer solutions and services. The solutions for the Enterprise segment include On-Premise solutions and services, and On-Demand multichannel cloud. The Imaging segment provides software solutions that help professionals and organizations to gain control of their document and information processes. Imaging segment include multi-function printer (MFP) scan automation solutions and MFP Print automation solutions.

Callidus Software Company Profile

Callidus Software Inc. (Callidus) is a provider of cloud-based sales, marketing, learning and customer experience solutions. The Company’s CallidusCloud enables its customers to manage their Lead to Money process with a suite of solutions that identify leads, implement territory and quota plans, enable sales forces, automate bid configuration pricing and quoting, manage contracts, streamline sales compensation and capture customer feedback, among others. Lead to Money is a process designed to help companies respond to the changing role of sales and marketing in the redefined buying cycle. The company’s Lead to Money suite and technology solutions include Lead, Planning, Enablement, Quotes and Proposals, Contracts, Incentives, Customer Experience and Technology. The Company provides a range of services to its customers, which include professional services, business process outsourcing services, maintenance and technical support services, and education services.

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