salesforce.com (CRM) and Nutanix (NTNX) Critical Analysis

salesforce.com (NYSE: CRM) and Nutanix (NASDAQ:NTNX) are both mid-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Insider and Institutional Ownership

85.8% of salesforce.com shares are held by institutional investors. Comparatively, 35.4% of Nutanix shares are held by institutional investors. 6.2% of salesforce.com shares are held by company insiders. Comparatively, 19.8% of Nutanix 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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for salesforce.com and Nutanix, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
salesforce.com 1 5 41 0 2.85
Nutanix 1 5 16 1 2.74

salesforce.com currently has a consensus target price of $113.13, indicating a potential upside of 7.25%. Nutanix has a consensus target price of $34.38, indicating a potential downside of 4.50%. Given salesforce.com’s stronger consensus rating and higher possible upside, research analysts clearly believe salesforce.com is more favorable than Nutanix.

Profitability

This table compares salesforce.com and Nutanix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
salesforce.com 0.09% 2.81% 1.32%
Nutanix -40.81% -271.31% -46.34%

Earnings and Valuation

This table compares salesforce.com and Nutanix’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
salesforce.com $8.39 billion 9.08 $179.63 million $0.01 10,548.00
Nutanix $766.87 million 7.27 -$458.01 million ($2.42) -14.88

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

Summary

salesforce.com beats Nutanix on 11 of the 13 factors compared between the two stocks.

About salesforce.com

Salesforce.com, Inc. is a provider of enterprise software, delivered through the cloud, with a focus on customer relationship management (CRM). The Company focuses on cloud, mobile, social, Internet of Things (IoT) and artificial intelligence technologies. The Company’s service offerings are configured and integrated with other platforms and enterprise applications. The Company delivers its service offerings via Internet browsers and on mobile devices. Its Customer Success Platform is a portfolio of service offerings providing sales force automation, customer service and support, marketing automation, digital commerce, community management, analytics, application development, IoT integration, collaborative productivity tools and its professional cloud services. Its cloud service offerings include Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, Community Cloud, Analytics Cloud, Salesforce Quip and Salesforce Platform.

About Nutanix

Nutanix, Inc. is a United States-based company, which provides an enterprise cloud platform that converges silos of server, virtualization and storage into an integrated solution. The Company’s enterprise cloud platform connects to public cloud services. It has operations in the United States; Europe, the Middle East and Africa; Asia-Pacific, and Other Americas. Its solution consists of software product families, including Acropolis and Prism. Its solution is delivered on commodity x86 servers. Acropolis includes its Distributed Storage Fabric that delivers enterprise-grade data management features. Acropolis also includes a built-in hypervisor, and its Application Mobility Fabric that enables application placement, conversion and migration across various hypervisors, and between public and private clouds. Prism delivers integrated virtualization and infrastructure management, operational analytics and a suite of one-click administration capabilities.

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