Nuance Communications (NASDAQ: NUAN) and Park City Group (NASDAQ:PCYG) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Nuance Communications and Park City Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nuance Communications -7.75% 12.15% 3.94%
Park City Group 17.98% 10.33% 8.19%

Analyst Ratings

This is a summary of recent recommendations for Nuance Communications and Park City Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nuance Communications 0 1 6 1 3.00
Park City Group 0 0 2 0 3.00

Nuance Communications presently has a consensus price target of $20.86, suggesting a potential upside of 23.49%. Park City Group has a consensus price target of $16.50, suggesting a potential upside of 88.57%. Given Park City Group’s higher probable upside, analysts plainly believe Park City Group is more favorable than Nuance Communications.

Earnings & Valuation

This table compares Nuance Communications and Park City Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nuance Communications $1.98 billion 2.51 -$150.99 million ($0.53) -31.87
Park City Group $18.94 million 8.99 $3.77 million $0.13 67.31

Park City Group has lower revenue, but higher earnings than Nuance Communications. Nuance Communications is trading at a lower price-to-earnings ratio than Park City Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

84.8% of Nuance Communications shares are held by institutional investors. Comparatively, 31.2% of Park City Group shares are held by institutional investors. 1.2% of Nuance Communications shares are held by insiders. Comparatively, 37.4% of Park City Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Nuance Communications has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Park City Group has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Summary

Park City Group beats Nuance Communications on 9 of the 14 factors compared between the two stocks.

About Nuance Communications

Nuance Communications, Inc. is a provider of voice recognition and natural language understanding solutions. The Company’s segments include Healthcare, Mobile, Enterprise and Imaging. The Healthcare segment provides clinical speech and clinical language understanding solutions. The solutions for the Healthcare segment include transcription solutions, Dragon Medical, and clinical document improvement (CDI) and coding solutions. Its Mobile segment provides a portfolio of specialized virtual assistants and connected services. The Enterprise segment provides automated customer solutions and services. The solutions for the Enterprise segment include On-Premise solutions and services, and On-Demand multichannel cloud. The Imaging segment provides software solutions that help professionals and organizations to gain control of their document and information processes. Imaging segment include multi-function printer (MFP) scan automation solutions and MFP Print automation solutions.

About Park City Group

Park City Group, Inc. is a software-as-a-service (SaaS) provider. The Company delivers its services through software products designed, developed, marketed and supported by the Company. The Company also has a Professional Services business, which conducts customization, implementation and training. The Company has approximately two services groups, such as The Business Analytics Group and The Professional Services Group. The Business Analytics Group offers business-consulting services to suppliers and retailers in the grocery, convenience store and specialty retail industries. The Professional Services Group provides consulting services. The Company’s solutions include Advanced Commerce and Supply-Chain Solutions, and Food Safety Solutions. The Company’s primary advanced commerce and supply-chain solutions include Scan Based Trading, ScoreTracker, Vendor Managed Inventory, Store Level Replenishment, Enterprise Supply Chain Planning, Fresh Market Manager and ActionManager.

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