Contrasting Commerce.com (NASDAQ:CMRC) and Palo Alto Networks (NASDAQ:PANW)

Palo Alto Networks (NASDAQ:PANW) and Commerce.com (NASDAQ:CMRC) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Palo Alto Networks and Commerce.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palo Alto Networks	2.67%	8.50%	4.35%
Commerce.com	-1.66%	20.49%	2.92%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Palo Alto Networks and Commerce.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palo Alto Networks	0	11	39	0	2.78
Commerce.com	3	2	1	1	2.00

Palo Alto Networks currently has a consensus target price of $398.55, indicating a potential upside of 14.51%. Commerce.com has a consensus target price of $4.17, indicating a potential upside of 20.77%. Given Commerce.com’s higher possible upside, analysts plainly believe Commerce.com is more favorable than Palo Alto Networks.

Insider & Institutional Ownership

79.8% of Palo Alto Networks shares are owned by institutional investors. Comparatively, 79.2% of Commerce.com shares are owned by institutional investors. 1.4% of Palo Alto Networks shares are owned by company insiders. Comparatively, 2.7% of Commerce.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Palo Alto Networks and Commerce.com”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palo Alto Networks	$11.48 billion	24.82	$307.00 million	$0.51	682.43
Commerce.com	$342.35 million	0.84	-$19.34 million	($0.07)	-49.29

Palo Alto Networks has higher revenue and earnings than Commerce.com. Commerce.com is trading at a lower price-to-earnings ratio than Palo Alto Networks, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Palo Alto Networks has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Commerce.com has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Summary

Palo Alto Networks beats Commerce.com on 10 of the 15 factors compared between the two stocks.

About Palo Alto Networks

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security operations, and threat intelligence and security consulting; professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. Palo Alto Networks, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.

About Commerce.com

BigCommerce Holdings, Inc. operates a software-as-a-service platform for small businesses, mid-markets, and large enterprises in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and internationally. The company’s platform provides various services for launching and scaling e-commerce operation, including store design, catalog management, hosting, checkout, order management, reporting, and pre-integrations. As of December 31, 2021, it served approximately 60,000 online stores across industries. BigCommerce Holdings, Inc. was founded in 2009 and is headquartered in Austin, Texas.