Critical Survey: Nuance Communications (NASDAQ:NUAN) versus Pagerduty (NASDAQ:PD)

Nuance Communications (NASDAQ:NUAN) and Pagerduty (NYSE:PD) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Nuance Communications and Pagerduty, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nuance Communications 0 1 2 0 2.67
Pagerduty 0 5 6 2 2.77

Nuance Communications presently has a consensus price target of $18.00, suggesting a potential upside of 10.84%. Pagerduty has a consensus price target of $34.73, suggesting a potential upside of 46.52%. Given Pagerduty’s stronger consensus rating and higher probable upside, analysts plainly believe Pagerduty is more favorable than Nuance Communications.

Dividends

Nuance Communications pays an annual dividend of $0.13 per share and has a dividend yield of 0.8%. Pagerduty does not pay a dividend. Nuance Communications pays out 16.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

89.2% of Nuance Communications shares are owned by institutional investors. Comparatively, 49.3% of Pagerduty shares are owned by institutional investors. 0.7% of Nuance Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Nuance Communications and Pagerduty’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nuance Communications $2.05 billion 2.26 -$159.92 million $0.81 20.05
Pagerduty $117.82 million 15.35 -$40.74 million N/A N/A

Pagerduty has lower revenue, but higher earnings than Nuance Communications.

Profitability

This table compares Nuance Communications and Pagerduty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nuance Communications 3.88% 13.93% 5.12%
Pagerduty N/A N/A N/A

About Nuance Communications

Nuance Communications, Inc. provides voice recognition and natural language understanding solutions worldwide. It operates through five segments: Healthcare, Automotive, Enterprise, Imaging, and Other. The Healthcare segment offers clinical speech and clinical language understanding solutions, such as Dragon Medical, a dictation software that allow physicians to capture and document patient care in real-time; transcription solutions, which enable physicians to streamline clinical documentation with a transcription platforms; clinical document improvement and coding solutions; diagnostic solutions that allow radiologists to document, collaborate, and share medical images and reports; and professional and personal productivity solutions to business users and consumers. The Automotive segment provides branded and personalized virtual assistants and connected car services for automotive manufacturers and their suppliers. The Enterprise segment offers On-Premise solutions and services, an automated customer service solution that comprise automated speech recognition, voice biometrics, transcription, text-to-speech, and dialog and analytics products; and On-Demand multichannel cloud, a platform, which offers enterprises the ability to implement automatic customer service. The Imaging segment provides multi-function printer (MFP) scanning and document management solutions; MFP printing and document management solutions to capture and automate paper to digital work flows; and PDF and OCR software for capturing, creation, and management of document work flows. The Other segment offers voicemail transcription and other value-added services to mobile operators; and speech recognition solutions and predictive text technologies for handset devices. The company was formerly known as ScanSoft, Inc. and changed its name to Nuance Communications, Inc. in October 2005. Nuance Communications, Inc. was founded in 1992 and is headquartered in Burlington, Massachusetts.

About Pagerduty

PagerDuty, Inc. operates an On-Call Management platform. The company's platform collects signals from software-enabled system or device, correlates and interprets signals to identify events, and engages team members to take action in real time. It serves developer, IT, security, and customer support segments. The company was incorporated in 2010 and is headquartered in San Francisco, California.

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