Comparing Rosetta Stone (RST) & Workday (WDAY)

Rosetta Stone (NYSE: RST) and Workday (NASDAQ:WDAY) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Institutional and Insider Ownership

72.3% of Rosetta Stone shares are held by institutional investors. Comparatively, 67.0% of Workday shares are held by institutional investors. 14.5% of Rosetta Stone shares are held by insiders. Comparatively, 37.7% of Workday shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Rosetta Stone has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Workday has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rosetta Stone and Workday’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rosetta Stone $194.09 million 1.45 -$27.55 million ($0.42) -30.05
Workday $1.57 billion 15.43 -$408.27 million ($1.44) -80.07

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

Profitability

This table compares Rosetta Stone and Workday’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rosetta Stone -4.97% N/A -3.43%
Workday -16.91% -19.73% -7.37%

Analyst Recommendations

This is a breakdown of recent ratings for Rosetta Stone and Workday, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rosetta Stone 0 0 1 0 3.00
Workday 1 19 14 0 2.38

Rosetta Stone presently has a consensus target price of $15.00, indicating a potential upside of 18.86%. Workday has a consensus target price of $107.65, indicating a potential downside of 6.63%. Given Rosetta Stone’s stronger consensus rating and higher possible upside, analysts plainly believe Rosetta Stone is more favorable than Workday.

Summary

Rosetta Stone beats Workday on 9 of the 14 factors compared between the two stocks.

About Rosetta Stone

Rosetta Stone Inc. (Rosetta Stone) offers personalized language and reading programs. The Company’s solutions are used by schools, businesses, government organizations and individuals around the world. Its segments include Enterprise & Education, which derives revenues from sales to educational institutions, corporations and government agencies worldwide, and Consumer, which derives revenue from sales to individuals and retail partners. Its cloud-based programs allow users to learn online or on-the-go via tablet or smartphone, whether in a classroom, corporate setting, or personal learning environment. Its Fit Brains business offers personalized brain training programs. The Company offers courses in over 30 languages across formats, including Web-based software subscriptions, digital downloads, mobile applications, and perpetual compact disc packages. It also offers a portfolio of technology-based learning products for personal use to the global consumer.

About Workday

Workday, Inc. is a provider of enterprise cloud applications for finance and human resources. The Company delivers financial management, human capital management and analytics applications designed for various companies, educational institutions and government agencies. As part of its applications, the Company provides embedded analytics that capture the content and context of everyday business events, facilitating informed decision-making from wherever users are working. Its applications include Workday Financial Management, Workday Human Capital Management (HCM) and Other Applications. It also provides open, standards-based Web-services application programming interfaces, and pre-built packaged integrations and connectors. Workday Financial Management is a unified application with a range of financial capabilities, relevant analytics and metrics, and auditable process management. Workday HCM allows an organization to staff, pay, organize and develop its global workforce.

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