RingCentral (NYSE:RNG) and Workday (NASDAQ:WDAY) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.
Volatility and Risk
RingCentral has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Workday has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for RingCentral and Workday, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
RingCentral presently has a consensus target price of $121.56, suggesting a potential upside of 4.93%. Workday has a consensus target price of $206.32, suggesting a potential downside of 3.35%. Given RingCentral’s stronger consensus rating and higher probable upside, analysts plainly believe RingCentral is more favorable than Workday.
Earnings and Valuation
This table compares RingCentral and Workday’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|RingCentral||$673.62 million||14.09||-$26.20 million||($0.04)||-2,896.00|
|Workday||$2.82 billion||17.09||-$418.26 million||($1.22)||-174.98|
RingCentral has higher earnings, but lower revenue than Workday. RingCentral is trading at a lower price-to-earnings ratio than Workday, indicating that it is currently the more affordable of the two stocks.
This table compares RingCentral and Workday’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
81.9% of RingCentral shares are held by institutional investors. Comparatively, 66.0% of Workday shares are held by institutional investors. 11.0% of RingCentral shares are held by insiders. Comparatively, 29.8% of Workday 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.
RingCentral beats Workday on 9 of the 15 factors compared between the two stocks.
RingCentral, Inc. provides software-as-a-service solutions that enable businesses to communicate, collaborate, and connect primarily in North America. The company's products include RingCentral Office, provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax through smartphones, tablets, PCs, and desk phones; RingCentral Professional, a cloud based virtual telephone service for professionals, as well as provides inbound call answering and management services, and includes inbound local, long-distance, and toll-free minutes; and RingCentral Fax that provides online fax capabilities that allow businesses to send and receive fax documents without a fax machine. Its products also comprise RingCentral Contact Center, a collaborative contact center solution that delivers omni-channel; and RingCentral Glip, a team messaging and collaboration solution that allows a range of teams to stay connected through various modes of communication through an integration with RingCentral Office. The company serves a range of industries, including financial services, healthcare, legal services, real estate, retail, technology, insurance, construction, hospitality, and state and local government, as well as others. It sells its products through a network of direct sales representatives, as well as sales agents and channel partners. The company was incorporated in 1999 and is headquartered in Belmont, California.
Workday, Inc. provides enterprise cloud applications worldwide. Its applications help its customers to manage critical business functions and optimize their financial and human capital resources. The company offers Workday Financial Management application that provides functions of general ledger, accounting, accounts payable and receivable, cash and asset management, revenue management, and grants management, as well as project and resource management, time and expense tracking, project billing, revenue recognition, financial reporting, and analytics. It also provides Workday Human Capital Management (HCM) application, which includes human resources management, such as workforce lifecycle and organization management, compensation, absence, and employee benefits administration; and global talent management comprising goal and performance management, succession planning, and career and development planning, as well as other HCM solutions, such as Workday Recruiting, Time Tracking, Payroll, and Learning. In addition, the company offers business planning, analytics, and other solutions, including Insights Business Planning Cloud, a solution with built-in intelligence for finance, human resource, and sales teams; Workday Prism Analytics that enables customers to bring together various data with analytics tools for financial and people analytics to make business decisions; Workday Student, a student and faculty lifecycle information system to help colleges and universities; and Workday Data-as-a-Service that provides data to customers to enable informed decision-making. The company serves technology, financial services, business and professional services, healthcare and life sciences, manufacturing, retail and hospitality, education, and government and non-profit industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was founded in 2005 and is headquartered in Pleasanton, California.
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