Nuance Communications (NASDAQ: NUAN) and Callidus Software (NASDAQ:CALD) are both mid-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Earnings & Valuation

This table compares Nuance Communications and Callidus Software’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nuance Communications $1.98 billion 2.51 -$150.99 million ($0.52) -32.87
Callidus Software $206.72 million 9.97 -$18.96 million ($0.35) -86.43

Callidus Software has lower revenue, but higher earnings than Nuance Communications. Callidus Software is trading at a lower price-to-earnings ratio than Nuance Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Nuance Communications and Callidus Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nuance Communications 0 1 6 1 3.00
Callidus Software 0 1 9 0 2.90

Nuance Communications currently has a consensus price target of $20.86, suggesting a potential upside of 22.04%. Callidus Software has a consensus price target of $30.11, suggesting a potential downside of 0.46%. Given Nuance Communications’ stronger consensus rating and higher possible upside, equities analysts plainly believe Nuance Communications is more favorable than Callidus Software.

Profitability

This table compares Nuance Communications and Callidus Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nuance Communications -7.75% 12.15% 3.94%
Callidus Software -9.54% -5.67% -3.39%

Insider and Institutional Ownership

85.0% of Nuance Communications shares are owned by institutional investors. Comparatively, 92.1% of Callidus Software shares are owned by institutional investors. 1.7% of Nuance Communications shares are owned by insiders. Comparatively, 1.6% of Callidus Software shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Nuance Communications has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Callidus Software has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

Nuance Communications beats Callidus Software on 9 of the 15 factors compared between the two stocks.

About Nuance Communications

Nuance Communications, Inc. is a provider of voice recognition and natural language understanding solutions. The Company’s segments include Healthcare, Mobile, Enterprise and Imaging. The Healthcare segment provides clinical speech and clinical language understanding solutions. The solutions for the Healthcare segment include transcription solutions, Dragon Medical, and clinical document improvement (CDI) and coding solutions. Its Mobile segment provides a portfolio of specialized virtual assistants and connected services. The Enterprise segment provides automated customer solutions and services. The solutions for the Enterprise segment include On-Premise solutions and services, and On-Demand multichannel cloud. The Imaging segment provides software solutions that help professionals and organizations to gain control of their document and information processes. Imaging segment include multi-function printer (MFP) scan automation solutions and MFP Print automation solutions.

About Callidus Software

Callidus Software Inc. (Callidus) is a provider of cloud-based sales, marketing, learning and customer experience solutions. The Company’s CallidusCloud enables its customers to manage their Lead to Money process with a suite of solutions that identify leads, implement territory and quota plans, enable sales forces, automate bid configuration pricing and quoting, manage contracts, streamline sales compensation and capture customer feedback, among others. Lead to Money is a process designed to help companies respond to the changing role of sales and marketing in the redefined buying cycle. The company’s Lead to Money suite and technology solutions include Lead, Planning, Enablement, Quotes and Proposals, Contracts, Incentives, Customer Experience and Technology. The Company provides a range of services to its customers, which include professional services, business process outsourcing services, maintenance and technical support services, and education services.

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