Cornerstone OnDemand (NASDAQ: CSOD) and Rally Software Development Corp (NYSE:RALY) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Institutional & Insider Ownership

91.4% of Cornerstone OnDemand shares are owned by institutional investors. 12.6% of Cornerstone OnDemand shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Cornerstone OnDemand and Rally Software Development Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cornerstone OnDemand $423.12 million 4.94 -$66.83 million ($1.25) -28.90
Rally Software Development Corp N/A N/A N/A ($1.27) -15.35

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cornerstone OnDemand -15.45% -173.27% -8.60%
Rally Software Development Corp -28.33% -54.33% -25.93%

Analyst Ratings

This is a breakdown of current ratings for Cornerstone OnDemand and Rally Software Development Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cornerstone OnDemand 1 6 3 1 2.36
Rally Software Development Corp 0 0 0 0 N/A

Cornerstone OnDemand currently has a consensus price target of $43.63, indicating a potential upside of 20.74%. Given Cornerstone OnDemand’s higher probable upside, equities analysts clearly believe Cornerstone OnDemand is more favorable than Rally Software Development Corp.

Summary

Cornerstone OnDemand beats Rally Software Development Corp on 9 of the 10 factors compared between the two stocks.

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.

Rally Software Development Corp Company Profile

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.

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