American Software (NASDAQ: AMSWA) is one of 107 public companies in the “Enterprise Software” industry, but how does it compare to its peers? We will compare American Software to similar businesses based on the strength of its institutional ownership, risk, earnings, valuation, dividends, analyst recommendations and profitability.

Profitability

This table compares American Software and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Software 14.81% 15.78% 11.15%
American Software Competitors -25.42% -219.16% -8.00%

Dividends

American Software pays an annual dividend of $0.44 per share and has a dividend yield of 3.6%. American Software pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Enterprise Software” companies pay a dividend yield of 0.7% and pay out 31.8% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings for American Software and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Software 0 0 1 0 3.00
American Software Competitors 361 2168 4083 116 2.59

American Software presently has a consensus price target of $12.25, indicating a potential downside of 0.57%. As a group, “Enterprise Software” companies have a potential downside of 1.46%. Given American Software’s stronger consensus rating and higher probable upside, analysts clearly believe American Software is more favorable than its peers.

Valuation & Earnings

This table compares American Software and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
American Software $106.29 million $14.62 million 23.69
American Software Competitors $1.82 billion $300.08 million 233.96

American Software’s peers have higher revenue and earnings than American Software. American Software is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

75.5% of American Software shares are held by institutional investors. Comparatively, 59.2% of shares of all “Enterprise Software” companies are held by institutional investors. 13.9% of American Software shares are held by company insiders. Comparatively, 23.5% of shares of all “Enterprise Software” companies are held 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.

Volatility & Risk

American Software has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, American Software’s peers have a beta of 1.12, suggesting that their average stock price is 12% more volatile than the S&P 500.

Summary

American Software beats its peers on 8 of the 15 factors compared.

About American Software

American Software, Inc. (American Software) develops, markets and supports a portfolio of software and services that delivers enterprise management, supply chain and retail planning solutions to the marketplace. The Company operates through three business segments: Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Information Technology (IT) Consulting. The SCM segment consists of Logility, Inc. and its subsidiary, Demand Management, Inc. (DMI), both of which provide supply chain and retail planning solutions to trading partners. The ERP segment consist of American Software ERP, which provides business software for manufacturers and distributors, and New Generation Computing, Inc. (NGC), which provides industry-specific business software to both retailers and manufacturers in the apparel, footwear, sewn products and furniture industries. The IT Consulting segment consists of The Proven Method, Inc., an IT staffing and consulting services firm.

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