Analyzing Callidus Software (CALD) & Zscaler (ZS)

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

Insider and Institutional Ownership

94.5% of Callidus Software shares are owned by institutional investors. Comparatively, 23.1% of Zscaler shares are owned by institutional investors. 1.6% of Callidus Software shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Callidus Software and Zscaler, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callidus Software 0 9 2 0 2.18
Zscaler 0 7 3 1 2.45

Callidus Software presently has a consensus price target of $33.10, suggesting a potential downside of 8.06%. Zscaler has a consensus price target of $35.86, suggesting a potential downside of 21.87%. Given Callidus Software’s higher probable upside, equities analysts plainly believe Callidus Software is more favorable than Zscaler.

Profitability

This table compares Callidus Software and Zscaler’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%
Zscaler N/A N/A N/A

Valuation and Earnings

This table compares Callidus Software and Zscaler’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
Zscaler $190.17 million 28.87 -$35.46 million ($0.31) -148.06

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

Summary

Zscaler beats Callidus Software on 8 of the 14 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.

Zscaler Company Profile

Zscaler, Inc. operates as a cloud security company worldwide. The company develops a software-as-a-service based security platform that secures access for users and devices to applications and services. It serves airline and transportation, conglomerate, consumer good and retail, financial service, healthcare, manufacturing, media and communication, public sector and education, technology, and telecommunications service industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.

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