Callidus Software (NASDAQ: CALD) and Gridsum (NASDAQ:GSUM) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Callidus Software and Gridsum, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callidus Software 0 1 9 0 2.90
Gridsum 0 0 0 0 N/A

Callidus Software currently has a consensus target price of $30.11, indicating a potential downside of 2.40%. Given Callidus Software’s higher possible upside, equities analysts clearly believe Callidus Software is more favorable than Gridsum.

Earnings & Valuation

This table compares Callidus Software and Gridsum’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Callidus Software $206.72 million 10.16 -$18.96 million ($0.36) -85.69
Gridsum $57.65 million 5.50 -$9.74 million ($0.72) -17.47

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

Profitability

This table compares Callidus Software and Gridsum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callidus Software -9.54% -5.67% -3.39%
Gridsum -27.91% -19.63% -11.15%

Volatility & Risk

Callidus Software has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Gridsum has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

92.1% of Callidus Software shares are owned by institutional investors. Comparatively, 35.7% of Gridsum shares are owned by institutional investors. 1.6% of Callidus Software shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Callidus Software beats Gridsum on 11 of the 13 factors compared between the two stocks.

About Callidus Software

Callidus Software Inc. (Callidus) is a provider of cloud-based sales, marketing, learning and customer experience solutions. The Company’s CallidusCloud enables its customers to manage their Lead to Money process with a suite of solutions that identify leads, implement territory and quota plans, enable sales forces, automate bid configuration pricing and quoting, manage contracts, streamline sales compensation and capture customer feedback, among others. Lead to Money is a process designed to help companies respond to the changing role of sales and marketing in the redefined buying cycle. The company’s Lead to Money suite and technology solutions include Lead, Planning, Enablement, Quotes and Proposals, Contracts, Incentives, Customer Experience and Technology. The Company provides a range of services to its customers, which include professional services, business process outsourcing services, maintenance and technical support services, and education services.

About Gridsum

Gridsum Holding Inc. is a holding company. The Company provides data analysis software for multinational and domestic enterprises, and government agencies in China. The Company’s technology, the Gridsum Big Data Platform performs multi-dimensional correlation analysis and analyzes real-time events. The Company offers various types of solutions and technologies. The Company’s software products are designed for a range of commercial and governmental applications. The Company’s products focus on digital marketing analytics and automation solutions. The Company offers Web analytics solutions based on data warehouse technology to build solutions on a distributed data warehouse architecture, using the open-source Hadoop framework. The Company delivers its solutions as cloud-based software-as-a-service (SaaS) offerings that manage information technology (IT) support costs by outsourcing hardware and software maintenance and support.

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