Head to Head Analysis: Bottomline Technologies (EPAY) and VMware (VMW)

Bottomline Technologies (NASDAQ:EPAY) and VMware (NYSE:VMW) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Earnings and Valuation

This table compares Bottomline Technologies and VMware’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bottomline Technologies $394.10 million 7.32 $9.32 million $0.76 89.45
VMware $7.92 billion 7.79 $570.00 million $3.86 39.12

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

Insider & Institutional Ownership

93.6% of Bottomline Technologies shares are held by institutional investors. Comparatively, 20.0% of VMware shares are held by institutional investors. 2.4% of Bottomline Technologies shares are held by company insiders. Comparatively, 29.9% of VMware shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Bottomline Technologies and VMware’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bottomline Technologies 2.69% 10.30% 4.81%
VMware 18.77% 20.00% 8.42%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bottomline Technologies and VMware, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bottomline Technologies 0 2 4 0 2.67
VMware 1 9 15 0 2.56

Bottomline Technologies presently has a consensus price target of $58.33, suggesting a potential downside of 14.19%. VMware has a consensus price target of $157.86, suggesting a potential upside of 4.53%. Given VMware’s higher probable upside, analysts plainly believe VMware is more favorable than Bottomline Technologies.

Risk and Volatility

Bottomline Technologies has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, VMware has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Summary

VMware beats Bottomline Technologies on 10 of the 14 factors compared between the two stocks.

About Bottomline Technologies

Bottomline Technologies (de), Inc. provides software as a service based solutions. It operates through four segments: Cloud Solutions, Banking Solutions, Payments and Transactional Documents, and Other. The company's products and services include Paymode-X, a cloud-based payment network, which allows businesses to transition to electronic integrated payables; and cloud-based financial messaging solutions that enable banks and corporations to exchange financial information, such as payment instructions, cash reporting, and other messages to facilitate transaction settlement. It also provides digital banking solutions that provide payments, cash management, and online banking solutions to financial institutions; and cloud-based legal spend management solutions and services that integrate with claims management, and time and billing systems to automate legal invoice management processes. In addition, the company offers cyber fraud and risk management solutions that monitor, replay, and analyze user behavior and payment transactions to flag and stop suspicious activity in real time; and payment and document automation solutions to automate a range of business documents and supply chain processes, as well as related Web-based delivery and document archive. Further, it provides healthcare solutions for patient registration, electronic signature, mobile document, and payments; and consulting, project implementation, and training services, as well as sells printers, check papers, and magnetic ink character recognition toners. The company serves customers in the banking, financial services, insurance, healthcare, technology, retail, communications, education, media, manufacturing, and government industries in the United States, the United Kingdom, Continental Europe, the Asia-Pacific, and the Middle East. Bottomline Technologies (de), Inc. was founded in 1989 and is headquartered in Portsmouth, New Hampshire.

About VMware

VMware, Inc. provides compute, cloud, mobility, networking, and security infrastructure software to businesses in the United States and internationally. The company offers compute products, including VMware vSphere, a data center platform, which enables users to deploy hypervisor, a layer of software that resides between the operating system and system hardware to enable compute virtualization; storage and availability products that provide data storage and protection options; network and security products; and cloud management and automation products to manage and automate overarching IT processes involved in provisioning IT services and resources to users from initial infrastructure deployment to retirement. It also provides software-defined data center suites, including VMware vCloud suite, vSphere with Operations Management, and VMware vRealize suite for building and managing a cloud infrastructure for use with the vSphere platform. In addition, the company offers VMware Cloud Foundation, a platform that brings together its compute, storage, and networking technologies into a natively integrated stack that delivers enterprise-ready cloud infrastructure for private and public clouds; and VMware Pulse IoT Center, an Internet of Things device management and monitoring solution. Further, it provides hybrid cloud computing solutions, such as VMware Cloud Provider Program, Hybrid VMware Cloud Foundation, and VMware Cloud Services; and end-user computing solutions that enable customers to securely deliver access to applications and data for their end users from various devices. The company sells its products through distributors, resellers, system vendors, and systems integrators. VMware, Inc. has a strategic alliance with Amazon Web Services to build and deliver an integrated hybrid solution. The company was incorporated in 1998 and is headquartered in Palo Alto, California. VMware, Inc. is a subsidiary of Dell Technologies Inc.

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