Salesforce (NYSE:CRM – Get Free Report) and Neonode (NASDAQ:NEON – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Volatility & Risk
Salesforce has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Neonode has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.
Valuation & Earnings
This table compares Salesforce and Neonode”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Salesforce | $37.90 billion | 4.69 | $6.20 billion | $7.49 | 25.31 |
| Neonode | $3.11 million | 9.28 | -$6.47 million | ($0.32) | -5.38 |
Salesforce has higher revenue and earnings than Neonode. Neonode is trading at a lower price-to-earnings ratio than Salesforce, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
80.4% of Salesforce shares are owned by institutional investors. Comparatively, 11.6% of Neonode shares are owned by institutional investors. 3.0% of Salesforce shares are owned by insiders. Comparatively, 23.9% of Neonode shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Salesforce and Neonode’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Salesforce | 17.91% | 14.41% | 8.89% |
| Neonode | 408.88% | -38.60% | -32.68% |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Salesforce and Neonode, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Salesforce | 1 | 12 | 29 | 1 | 2.70 |
| Neonode | 1 | 1 | 0 | 0 | 1.50 |
Salesforce currently has a consensus target price of $323.57, suggesting a potential upside of 70.68%. Neonode has a consensus target price of $6.00, suggesting a potential upside of 248.84%. Given Neonode’s higher probable upside, analysts clearly believe Neonode is more favorable than Salesforce.
Summary
Salesforce beats Neonode on 11 of the 15 factors compared between the two stocks.
About Salesforce
Salesforce, Inc. provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company's service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale. In addition, its platform offering comprise a flexible platform that enables companies of various sizes, locations, and industries to build business workflow and apps with customer; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, an intelligent productivity platform. The company's marketing services enables companies to plan, personalize, automate, and optimize customer marketing journey, connecting interaction, and connected products; and commerce services, which empowers shopping experience across various customer touchpoint, such as mobile, web, social, and stores and provides click-to-code tools that offers customers to build and deploy solutions. Further, its analytics offering includes Tableau, an end-to-end analytics solution for range of enterprise use cases and intelligent analytics with AI models, spot trends, predict outcomes, creates summaries, timely recommendations, and take action from any device; and integration service including MuleSoft, which provides building blocks to deliver end-to-end and connected experiences. Additionally, the company provides data cloud, a hyperscale data engine native to Salesforce; vertical services to meet the needs of customers in industries, such as financial services, healthcare and life sciences, manufacturing and automotive and government; and offers salesforce starter for small and medium-sized businesses. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.
About Neonode
Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.
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