Rally Software Development (RALY) and Qualys (QLYS) Critical Contrast

Rally Software Development (NYSE: RALY) and Qualys (NASDAQ:QLYS) are both technology companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Valuation and Earnings

This table compares Rally Software Development and Qualys’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rally Software Development N/A N/A N/A ($1.27) -15.35
Qualys $197.93 million 11.19 $19.22 million $1.11 52.61

Qualys has higher revenue and earnings than Rally Software Development. Rally Software Development is trading at a lower price-to-earnings ratio than Qualys, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Rally Software Development and Qualys, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rally Software Development 0 0 0 0 N/A
Qualys 0 9 7 0 2.44

Qualys has a consensus price target of $53.62, suggesting a potential downside of 8.19%. Given Qualys’ higher probable upside, analysts plainly believe Qualys is more favorable than Rally Software Development.

Profitability

This table compares Rally Software Development and Qualys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rally Software Development -28.33% -54.33% -25.93%
Qualys 19.76% 14.81% 9.57%

Institutional & Insider Ownership

75.4% of Qualys shares are owned by institutional investors. 20.9% of Qualys shares are owned by company 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.

Summary

Qualys beats Rally Software Development on 9 of the 9 factors compared between the two stocks.

Rally Software Development Company Profile

Rally Software Development Corp. (Rally) is a United States-based company, which offers consulting and training services. The Company offers software as a service (SaaS) platform for organizations to manage the software development lifecycle. The Company’s solutions for Agile includes Agile University, which is an online source for Agile training, and Agile Commons, which is a collaborative Web community focused on software agility. The Company offers a range of Agile platform and products for Application Lifecycle Management (ALM). The Company’s solutions include enterprise scale agile, which consists of Flowdock and leading SAFe; analytics and metrics, which consists of Rally Insights Solution and Agile coaching; product and portfolio management, which include Agile Portfolio Management and transformation consulting, and Team Collaboration, which consists of Rally scrum team launch and test driven development. Its services include transformation consulting, training and coaching.

Qualys Company Profile

Qualys, Inc. is a provider of cloud-based security and compliance solutions. The Company’s solutions enable organizations to identify security risks to their information technology (IT) infrastructures, help protect their IT systems and applications from cyber-attacks. Its suite of security and compliance solutions delivered on its Qualys Cloud Platform enables its customers to identify their IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend remediation actions and verify the implementation of such actions. Its Qualys Cloud Platform consists of a suite of IT security and compliance solutions. The Qualys Cloud Suite includes solutions, such as Vulnerability Management, Continuous Monitoring, Cloud Agent, AssetView, ThreatPROTECT, Policy Compliance, Payment Card Industry Compliance, Security Assessment Questionnaire, Web Application Scanning and Web Application Firewall. It provides its solutions through a software-as-a-service model.

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