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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for PTC and Rosetta Stone, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PTC 0 3 14 0 2.82
Rosetta Stone 0 0 1 0 3.00

PTC presently has a consensus price target of $63.13, indicating a potential upside of 15.13%. Rosetta Stone has a consensus price target of $15.00, indicating a potential upside of 60.60%. Given Rosetta Stone’s stronger consensus rating and higher possible upside, analysts clearly believe Rosetta Stone is more favorable than PTC.

Profitability

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

Net Margins Return on Equity Return on Assets
PTC -3.46% 6.69% 2.44%
Rosetta Stone -6.06% -926.26% -4.89%

Institutional and Insider Ownership

98.2% of PTC shares are held by institutional investors. Comparatively, 73.0% of Rosetta Stone shares are held by institutional investors. 1.0% of PTC shares are held by company insiders. Comparatively, 14.5% of Rosetta Stone shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

PTC has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Rosetta Stone has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares PTC and Rosetta Stone’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PTC $1.15 billion 5.51 $91.94 million ($0.35) -156.66
Rosetta Stone $193.97 million 1.07 $2.56 million ($0.53) -17.62

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

Summary

PTC beats Rosetta Stone on 10 of the 13 factors compared between the two stocks.

PTC Company Profile

PTC Inc. is a global computer software and services company. The Company offers a portfolio of computer-aided design (CAD) modeling, product lifecycle management (PLM) and service lifecycle management (SLM) solutions for manufacturers to create, operate, and service products. It offers a suite of Internet of Things (IoT) solutions that enables its customers to connect, manage and analyze data, and create applications. Its segments include the Solutions Group, the IoT Group and Professional Services. The Solutions Group segment includes its CAD, PLM and SLM products. The IoT Group segment includes its IoT, analytics and augmented reality (AR) solutions. The Professional Services segment includes consulting, implementation and training business. Its IoT products include ThingWorx, KEPServerEX, Vuforia Studio and Vuforia. Its CAD products include Creo and Mathcad. Its PLM products include Windchill, Integrity, Navigate and Creo View. Its SLM products include Servigistics and Arbortext.

Rosetta Stone Company Profile

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.

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