Qualys (NASDAQ: QLYS) and Cornerstone OnDemand (NASDAQ:CSOD) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

75.3% of Qualys shares are owned by institutional investors. Comparatively, 90.5% of Cornerstone OnDemand shares are owned by institutional investors. 30.2% of Qualys shares are owned by company insiders. Comparatively, 12.6% of Cornerstone OnDemand shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Qualys and Cornerstone OnDemand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qualys 18.92% 14.69% 9.39%
Cornerstone OnDemand -15.39% -182.51% -8.45%

Valuation & Earnings

This table compares Qualys and Cornerstone OnDemand’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Qualys $211.63 million 7.86 $52.41 million $1.02 43.73
Cornerstone OnDemand $445.02 million 4.35 -$45.49 million ($1.21) -28.17

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Qualys and Cornerstone OnDemand, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qualys 0 8 7 0 2.47
Cornerstone OnDemand 2 4 6 1 2.46

Qualys presently has a consensus target price of $45.09, indicating a potential upside of 1.10%. Cornerstone OnDemand has a consensus target price of $44.33, indicating a potential upside of 30.05%. Given Cornerstone OnDemand’s higher probable upside, analysts clearly believe Cornerstone OnDemand is more favorable than Qualys.

Risk & Volatility

Qualys has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Cornerstone OnDemand has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Summary

Qualys beats Cornerstone OnDemand on 10 of the 14 factors compared between the two stocks.

Qualys Company Profile

Qualys, Inc. is a provider of cloud-based security and compliance solutions. The Company’s solutions enable organizations to identify security risks to their information technology (IT) infrastructures, help protect their IT systems and applications from cyber-attacks. Its suite of security and compliance solutions delivered on its Qualys Cloud Platform enables its customers to identify their IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend remediation actions and verify the implementation of such actions. Its Qualys Cloud Platform consists of a suite of IT security and compliance solutions. The Qualys Cloud Suite includes solutions, such as Vulnerability Management, Continuous Monitoring, Cloud Agent, AssetView, ThreatPROTECT, Policy Compliance, Payment Card Industry Compliance, Security Assessment Questionnaire, Web Application Scanning and Web Application Firewall. It provides its solutions through a software-as-a-service model.

Cornerstone OnDemand Company Profile

Cornerstone OnDemand, Inc. is a cloud computing company. The Company provides learning and human capital management software, delivered as Software-as-a-Service (SaaS). Its human capital management platform combines the talent management solutions with analytics and human resources (HR) administration solutions to enable organizations to manage the employee lifecycle. Its enterprise human capital management platform consists of four product suites: its Recruiting suite, which helps organizations to source and attract candidates, assess and select applicants, onboard new hires and manage the entire recruiting process; its Learning suite, which enables clients to manage training and development programs; its Performance suite, which provides tools to manage goal setting, performance reviews, compensation management and succession planning, and HR Administration suite, which supports employee records administration, workforce planning and compliance reporting.

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