Callidus Software (CALD) versus Virtusa (VRTU) Critical Analysis

Callidus Software (NASDAQ: CALD) and Virtusa (NASDAQ:VRTU) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

94.5% of Callidus Software shares are owned by institutional investors. Comparatively, 85.6% of Virtusa shares are owned by institutional investors. 1.6% of Callidus Software shares are owned by insiders. Comparatively, 6.0% of Virtusa shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Callidus Software -8.01% -4.16% -2.42%
Virtusa 0.12% 5.94% 3.22%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Callidus Software and Virtusa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callidus Software 0 9 2 0 2.18
Virtusa 0 2 4 1 2.86

Callidus Software currently has a consensus price target of $33.10, indicating a potential downside of 8.06%. Virtusa has a consensus price target of $58.71, indicating a potential upside of 20.61%. Given Virtusa’s stronger consensus rating and higher probable upside, analysts plainly believe Virtusa is more favorable than Callidus Software.

Risk & Volatility

Callidus Software has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Virtusa has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Callidus Software $253.09 million 9.45 -$20.27 million ($0.19) -189.47
Virtusa $1.02 billion 1.42 $1.25 million $0.89 54.70

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

Summary

Virtusa beats Callidus Software on 13 of the 15 factors compared between the two stocks.

Callidus Software Company Profile

Callidus Software Inc. provides cloud-based sales, marketing, learning, and customer experience solutions worldwide. The company enables its customers to sell Lead to Money suite of solutions that identify leads, train personnel, implement territory and quota plans, enable sales forces, automate configuration pricing and quoting, manage contracts, streamline sales compensation, capture customer feedback, and provide predictive analytics for competitive advantage. It offers Lead to Money suite and technology solutions, which include sales performance management solutions, such as Commissions, Territory and Quota, and SalesMotivate; Sales Execution solutions, including Configure Price Quote, Contract Lifecycle Management, Datahug, and Revsym; and Customer Engagement solutions comprising Marketing Automation, Voice of the Customer, and ServiceMotivate. The company also provides Sales Enablement and Learning solutions consisting of Enablement, Litmos Learning Management System, Litmos Heroes, and Coaching; Technology solutions, including Database Management System, Thunderbridge Advanced Analytics, Thunderbridge Augmented Intelligence, Workflow, and Connect Enterprise; and Vertical Solutions, such as Producer Pro, Telco Dealer Pro, Incentive Compensation Management, and DS Pro. In addition, it offers a range of services comprising professional, business process outsourcing, maintenance and technical support, and education services Callidus Software Inc. was founded in 1996 and is headquartered in Dublin, California.

Virtusa Company Profile

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services worldwide. The company offers business and IT consulting services, including advisory/target operating model, business process re-engineering/business management, transformational solution consulting, and business/technology alignment analysis; omni-channel digital strategy, experience design accelerated solution design, and employee engagement; and application portfolio rationalization, SDLC transformation, and BA competency transformation services. It also provides technology implementation services, such as application development, software product engineering, CRM and SAP implementation, content management, enterprise mobility, cloud computing, and social media solutions; systems consolidation and rationalization, technology migration and porting, and legacy application Web-enablement; data management, business intelligence, reporting and decision support, master data management, data integration, and big data analytics; and software quality assurance and managed testing services. In addition, the company offers application outsourcing services comprising application maintenance and support, applications enhancement, and cloud-environment management and support; managed infrastructure, and remote application monitoring and support services; and IT efficiency improvement services. Further, it offers digital engineering and operational excellence services-based, and transformational solutions. The company provides its services to communications and technology; banking, financial services, and insurance; and media and information industries. The company was formerly known as eRunway, Inc. and changed its name to Virtusa Corporation in April 2002. Virtusa Corporation was founded in 1996 and is headquartered in Southborough, Massachusetts.

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