Synchronoss Technologies (NASDAQ: SNCR) and Rally Software Development (NYSE:RALY) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Synchronoss Technologies and Rally Software Development’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Synchronoss Technologies N/A N/A N/A
Rally Software Development -28.33% -54.33% -25.93%

Institutional and Insider Ownership

68.4% of Synchronoss Technologies shares are owned by institutional investors. 10.5% of Synchronoss Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Synchronoss Technologies and Rally Software Development’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synchronoss Technologies $476.67 million 0.96 $19.58 million $0.44 22.00
Rally Software Development N/A N/A N/A ($1.27) -15.35

Synchronoss Technologies has higher revenue and earnings than Rally Software Development. Rally Software Development is trading at a lower price-to-earnings ratio than Synchronoss Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Synchronoss Technologies and Rally Software Development, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synchronoss Technologies 2 6 0 0 1.75
Rally Software Development 0 0 0 0 N/A

Synchronoss Technologies presently has a consensus target price of $18.71, suggesting a potential upside of 93.33%. Given Synchronoss Technologies’ higher probable upside, equities research analysts clearly believe Synchronoss Technologies is more favorable than Rally Software Development.

Summary

Synchronoss Technologies beats Rally Software Development on 8 of the 8 factors compared between the two stocks.

About Synchronoss Technologies

Synchronoss Technologies, Inc. is a global software and services company, which provides technologies and services for the mobile transformation of business. The Company’s portfolio in the Consumer and Enterprise markets contains offerings, such as personal cloud, secure-mobility, identity management and scalable messaging platforms, products and solutions. Its products and platforms are designed to enable multiple converged communication services to be managed across a range of distribution channels, including e-commerce, m-commerce, telesales, customer stores, indirect and other retail outlets. The Company operates in and markets their solutions and services directly through their sales organizations in North America, Europe, the Middle East and Africa (EMEA), Latin America and the Asia-Pacific region. It delivers technologies for mobile transformation to service provider and enterprise customers in regulated verticals and use cases.

About Rally Software Development

Rally Software Development Corp. (Rally) is a United States-based company, which offers consulting and training services. The Company offers software as a service (SaaS) platform for organizations to manage the software development lifecycle. The Company’s solutions for Agile includes Agile University, which is an online source for Agile training, and Agile Commons, which is a collaborative Web community focused on software agility. The Company offers a range of Agile platform and products for Application Lifecycle Management (ALM). The Company’s solutions include enterprise scale agile, which consists of Flowdock and leading SAFe; analytics and metrics, which consists of Rally Insights Solution and Agile coaching; product and portfolio management, which include Agile Portfolio Management and transformation consulting, and Team Collaboration, which consists of Rally scrum team launch and test driven development. Its services include transformation consulting, training and coaching.

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