Critical Analysis: BroadSoft (BSFT) and Verisk Analytics (VRSK)
BroadSoft (NASDAQ: BSFT) and Verisk Analytics (NASDAQ:VRSK) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Valuation & Earnings
This table compares BroadSoft and Verisk Analytics’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|BroadSoft||$354.53 million||4.33||$24.27 million||($0.29)||-170.86|
|Verisk Analytics||$2.03 billion||6.57||$941.60 million||$2.74||29.58|
Verisk Analytics has higher revenue and earnings than BroadSoft. BroadSoft is trading at a lower price-to-earnings ratio than Verisk Analytics, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for BroadSoft and Verisk Analytics, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BroadSoft currently has a consensus target price of $47.00, indicating a potential downside of 5.15%. Verisk Analytics has a consensus target price of $85.73, indicating a potential upside of 5.77%. Given Verisk Analytics’ higher possible upside, analysts clearly believe Verisk Analytics is more favorable than BroadSoft.
Volatility and Risk
BroadSoft has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Verisk Analytics has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.
This table compares BroadSoft and Verisk Analytics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
93.3% of Verisk Analytics shares are held by institutional investors. 1.5% of BroadSoft shares are held by company insiders. Comparatively, 3.4% of Verisk Analytics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Verisk Analytics beats BroadSoft on 10 of the 14 factors compared between the two stocks.
BroadSoft Company Profile
BroadSoft, Inc. is a global provider of software and services that enable telecommunications service providers to deliver hosted, cloud-based Unified Communications (UC) to their enterprise customers. The BroadSoft Business solution is a communications and collaboration offering that enables telecommunications service providers to offer businesses and other enterprises UC features and functionalities on a cloud-delivered basis without the need for traditional premise-based private branch exchange (PBX) equipment. BroadSoft Business includes its UC-One, Team-One and CC-One applications. The capabilities of the BroadSoft Business offering can be accessed through desk phones, smartphones, tablets, laptops and personal computers. Its BroadWorks SIP Trunking solution enables service providers to provide Internet protocol (IP) interconnectivity and additional services to enterprises that already have premise-based PBXs. Its training services include systems administration and provisioning.
Verisk Analytics Company Profile
Verisk Analytics, Inc. is a data analytics provider serving customers in insurance, natural resources and financial services. The Company operates through two segments: Risk Assessment and Decision Analytics. Its Risk Assessment segment serves its property and casualty insurance customers and focuses on prediction of loss, selection and pricing of risk, and compliance with their reporting requirements in each United States state in which they operate. In the Decision Analytics segment, the Company develops predictive models to forecast scenarios and produce both standard and customized analytics that help its customers manage their businesses, including predicting loss, selecting and pricing risk, detecting fraud before and after a loss event, and quantifying losses. It offers predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, natural resources intelligence, economic forecasting and various other fields.
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