Callidus Software (NASDAQ: CALD) and Top Image Systems (NASDAQ:TISA) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Volatility and Risk

Callidus Software has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Top Image Systems has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Callidus Software and Top Image Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callidus Software -10.08% -6.25% -3.79%
Top Image Systems -25.99% -38.85% -20.08%

Valuation and Earnings

This table compares Callidus Software and Top Image Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Callidus Software $227.99 million 7.73 -$7.84 million ($0.37) -70.40
Top Image Systems $29.43 million 0.73 -$4.64 million ($0.43) -2.77

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Callidus Software and Top Image Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callidus Software 0 1 8 0 2.89
Top Image Systems 0 1 2 0 2.67

Callidus Software currently has a consensus price target of $25.13, suggesting a potential downside of 3.55%. Top Image Systems has a consensus price target of $2.50, suggesting a potential upside of 110.08%. Given Top Image Systems’ higher possible upside, analysts plainly believe Top Image Systems is more favorable than Callidus Software.

Insider & Institutional Ownership

94.8% of Callidus Software shares are owned by institutional investors. Comparatively, 5.3% of Top Image Systems shares are owned by institutional investors. 1.6% of Callidus Software shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Callidus Software beats Top Image Systems on 10 of the 13 factors compared between the two stocks.

Callidus Software Company Profile

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.

Top Image Systems Company Profile

Top Image Systems Ltd. (TIS) is a developer and marketer of intelligent content capture and workflow automation solutions for managing and validating incoming content in any format from any source. The Company’s solutions deliver digital content to the people and applications that drive an enterprise by using advanced network, mobile and cloud technologies. Its products integrate information regardless of the source and format of the data, whether structured, as in the case of application forms or surveys, or semi-structured, such as invoices, purchase orders, checks, freight and shipping bills, and others or unstructured. Its software minimizes the need for manual data entry by automatically capturing, reading, understanding, identifying, processing, classifying and routing the information contained in documents. Its mobiFLOW software development kit (SDK) is a multi-purpose mobile capture and processing platform that enables capture of any document of any size using a mobile device.

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