Amber Road (NYSE: AMBR) and The Ultimate Software Group (NASDAQ:ULTI) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Profitability

This table compares Amber Road and The Ultimate Software Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amber Road -20.19% -53.22% -14.53%
The Ultimate Software Group 3.31% 6.84% 2.45%

Institutional & Insider Ownership

72.6% of Amber Road shares are held by institutional investors. 13.1% of Amber Road shares are held by insiders. Comparatively, 4.9% of The Ultimate Software Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Amber Road and The Ultimate Software Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amber Road 0 0 3 0 3.00
The Ultimate Software Group 1 4 16 0 2.71

Amber Road presently has a consensus price target of $12.00, indicating a potential upside of 64.61%. The Ultimate Software Group has a consensus price target of $231.58, indicating a potential upside of 11.82%. Given Amber Road’s stronger consensus rating and higher possible upside, research analysts plainly believe Amber Road is more favorable than The Ultimate Software Group.

Volatility and Risk

Amber Road has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, The Ultimate Software Group has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Valuation & Earnings

This table compares Amber Road and The Ultimate Software Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amber Road $73.16 million 2.71 -$18.72 million ($0.57) -12.79
The Ultimate Software Group $781.29 million 7.92 $30.25 million $0.97 213.51

The Ultimate Software Group has higher revenue and earnings than Amber Road. Amber Road is trading at a lower price-to-earnings ratio than The Ultimate Software Group, indicating that it is currently the more affordable of the two stocks.

Summary

The Ultimate Software Group beats Amber Road on 9 of the 13 factors compared between the two stocks.

Amber Road Company Profile

Amber Road, Inc. is a provider of cloud-based global trade management (GTM) solutions. The Company’s GTM solutions include modules for logistics contract and rate management, supply chain visibility and event management, international trade compliance, and Global Knowledge trade content database to importers and exporters, non-vessel owning common carriers (resellers), and ocean carriers. The Company delivers its GTM solution using a software-as-a-service (SaaS) model. The Company’s solution automates the global supply chain across sourcing, logistics, cross-border trade and regulatory compliance activities. The Company’s GTM solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in approximately 145 countries, and a global supply chain network connecting its customers with the trading partners, including suppliers, freight forwarders, customs brokers and transportation carriers.

The Ultimate Software Group Company Profile

The Ultimate Software Group, Inc. (Ultimate) is a cloud provider of people management solutions, referred to as human capital management (HCM). The Company’s UltiPro product suite (UltiPro) is an engaging solution that has human resources (HR), payroll and benefits management. As of December 31, 2016, UltiPro included global people management, available in 14 languages with more than 35 country-specific localizations. The solution is delivered through software-as-a-service (SaaS) to organizations based in the United States and Canada, including those with global workforces. The UltiPro solution includes feature sets for talent acquisition and onboarding, HR management and compliance, benefits management and online enrollment, payroll, performance management, compensation management with salary planning, budgeting, and development of incentive plans, succession management, reporting and analytical decision-making and predictive tools, and time and attendance.

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