Rally Software Development Corp (NASDAQ: RALY) and Salesforce.com (NYSE:CRM) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Institutional & Insider Ownership

87.0% of Salesforce.com shares are held by institutional investors. 6.7% of Salesforce.com shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Rally Software Development Corp and Salesforce.com, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rally Software Development Corp 0 0 0 0 N/A
Salesforce.com 1 4 43 0 2.88

Salesforce.com has a consensus target price of $102.07, indicating a potential upside of 6.89%. Given Salesforce.com’s higher possible upside, analysts clearly believe Salesforce.com is more favorable than Rally Software Development Corp.

Earnings & Valuation

This table compares Rally Software Development Corp and Salesforce.com’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rally Software Development Corp N/A N/A N/A N/A N/A
Salesforce.com $9.39 billion 7.24 $464.08 million ($0.11) -868.09

Salesforce.com has higher revenue and earnings than Rally Software Development Corp.

Profitability

This table compares Rally Software Development Corp and Salesforce.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rally Software Development Corp -28.33% -54.33% -25.93%
Salesforce.com -0.85% 1.83% 0.84%

Summary

Salesforce.com beats Rally Software Development Corp on 8 of the 8 factors compared between the two stocks.

About Rally Software Development Corp

Rally Software Development Corp. (Rally) is a United States-based company, which offers consulting and training services. The Company offers software as a service (SaaS) platform for organizations to manage the software development lifecycle. The Company’s solutions for Agile includes Agile University, which is an online source for Agile training, and Agile Commons, which is a collaborative Web community focused on software agility. The Company offers a range of Agile platform and products for Application Lifecycle Management (ALM). The Company’s solutions include enterprise scale agile, which consists of Flowdock and leading SAFe; analytics and metrics, which consists of Rally Insights Solution and Agile coaching; product and portfolio management, which include Agile Portfolio Management and transformation consulting, and Team Collaboration, which consists of Rally scrum team launch and test driven development. Its services include transformation consulting, training and coaching.

About Salesforce.com

Salesforce.com, inc. is a provider of enterprise software, delivered through the cloud, with a focus on customer relationship management (CRM). The Company focuses on cloud, mobile, social, Internet of Things (IoT) and artificial intelligence technologies. The Company’s service offerings are configured and integrated with other platforms and enterprise applications. The Company delivers its service offerings via Internet browsers and on mobile devices. Its Customer Success Platform is a portfolio of service offerings providing sales force automation, customer service and support, marketing automation, digital commerce, community management, analytics, application development, IoT integration, collaborative productivity tools and its professional cloud services. Its cloud service offerings include Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Community Cloud, Analytics Cloud, Salesforce Quip and Salesforce Platform.

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