Financial Review: Jack Henry & Associates (NASDAQ:JKHY) & CoStar Group (NASDAQ:CSGP)

Jack Henry & Associates (NASDAQ:JKHY) and CoStar Group (NASDAQ:CSGP) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Jack Henry & Associates and CoStar Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	7	4	1	2.50
CoStar Group	2	5	12	1	2.60

Jack Henry & Associates currently has a consensus target price of $184.56, indicating a potential downside of 1.57%. CoStar Group has a consensus target price of $93.38, indicating a potential upside of 36.87%. Given CoStar Group’s stronger consensus rating and higher possible upside, analysts plainly believe CoStar Group is more favorable than Jack Henry & Associates.

Risk and Volatility

Jack Henry & Associates has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, CoStar Group has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

98.8% of Jack Henry & Associates shares are owned by institutional investors. Comparatively, 96.6% of CoStar Group shares are owned by institutional investors. 0.6% of Jack Henry & Associates shares are owned by insiders. Comparatively, 1.1% of CoStar Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Jack Henry & Associates and CoStar Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.38 billion	5.71	$455.75 million	$6.58	28.50
CoStar Group	$2.74 billion	10.57	$138.70 million	$0.05	1,364.60

Jack Henry & Associates has higher earnings, but lower revenue than CoStar Group. Jack Henry & Associates is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Jack Henry & Associates and CoStar Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	19.86%	23.11%	16.10%
CoStar Group	0.66%	2.45%	1.99%

Summary

CoStar Group beats Jack Henry & Associates on 8 of the 14 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

About CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.