Critical Analysis: Salesforce (NYSE:CRM) versus Telos (NASDAQ:TLS)

Telos (NASDAQ:TLS) and Salesforce (NYSE:CRM) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Volatility and Risk

Telos has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Salesforce has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

62.1% of Telos shares are held by institutional investors. Comparatively, 80.4% of Salesforce shares are held by institutional investors. 14.9% of Telos shares are held by insiders. Comparatively, 3.5% of Salesforce shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Telos and Salesforce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telos	-8.13%	-2.60%	-1.80%
Salesforce	21.99%	24.90%	11.27%

Analyst Recommendations

This is a breakdown of recent recommendations for Telos and Salesforce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telos	1	3	2	1	2.43
Salesforce	3	14	30	3	2.66

Telos currently has a consensus price target of $6.50, indicating a potential upside of 58.54%. Salesforce has a consensus price target of $275.14, indicating a potential upside of 17.90%. Given Telos’ higher possible upside, equities analysts plainly believe Telos is more favorable than Salesforce.

Earnings and Valuation

This table compares Telos and Salesforce”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telos	$164.80 million	1.86	-$36.55 million	($0.21)	-19.52
Salesforce	$41.52 billion	4.63	$7.46 billion	$10.97	21.27

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

Summary

Salesforce beats Telos on 13 of the 15 factors compared between the two stocks.

About Telos

Telos Corporation, together with its subsidiaries, provides cyber, cloud, and enterprise security solutions worldwide. The company operates in two segments, Security Solutions and Secure Networks. It provides Xacta, a platform for enterprise cyber risk management and security compliance automation; and consulting, assessment and compliance, engineering and evaluation, operations, and penetration testing services. The company also offers Telos Automated Message Handling System, a web-based organizational message distribution and management for mission-critical communications used by military field operatives; and Telos Advanced Cyber Analytics solution, which is a threat feed source of global Internet Protocol addresses known to engage in potentially malicious activity, including mass scanning and generic opportunistic attacks; and Telos Ghost, a solution to eliminate cyberattack surfaces by obfuscating and encrypting data, masking user identity and location, and hiding network resources, as well as provides security and privacy for intelligence gathering, cyber threat protection, securing critical infrastructure, and protecting communications and applications. In addition, the company provides IDTrust360, an enterprise digital trusted identity risk platform for extending flexible hybrid cloud identity services; and ONYX, a touchless fingerprint biometric solution for mobile devices. Further, it offers secure mobility solutions that enable remote work and minimize operational and security concerns across and beyond the enterprise; and network management and defense services for operating, administrating, and defending complex enterprise networks and services for defensive cyber operations. It serves the United States federal government, large commercial businesses, state and local governments, and international customers. Telos Corporation was founded in 1968 and is headquartered in Ashburn, Virginia.

About Salesforce

Salesforce, Inc. provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company's service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale. In addition, its platform offering comprise a flexible platform that enables companies of various sizes, locations, and industries to build business workflow and apps with customer; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, an intelligent productivity platform. The company's marketing services enables companies to plan, personalize, automate, and optimize customer marketing journey, connecting interaction, and connected products; and commerce services, which empowers shopping experience across various customer touchpoint, such as mobile, web, social, and stores and provides click-to-code tools that offers customers to build and deploy solutions. Further, its analytics offering includes Tableau, an end-to-end analytics solution for range of enterprise use cases and intelligent analytics with AI models, spot trends, predict outcomes, creates summaries, timely recommendations, and take action from any device; and integration service including MuleSoft, which provides building blocks to deliver end-to-end and connected experiences. Additionally, the company provides data cloud, a hyperscale data engine native to Salesforce; vertical services to meet the needs of customers in industries, such as financial services, healthcare and life sciences, manufacturing and automotive and government; and offers salesforce starter for small and medium-sized businesses. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.