Avalara (NYSE:AVLR) and ServiceNow (NYSE:NOW) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Institutional & Insider Ownership
68.4% of Avalara shares are owned by institutional investors. Comparatively, 95.8% of ServiceNow shares are owned by institutional investors. 1.6% of ServiceNow shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for Avalara and ServiceNow, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Avalara presently has a consensus price target of $48.00, suggesting a potential upside of 31.58%. ServiceNow has a consensus price target of $203.04, suggesting a potential upside of 9.64%. Given Avalara’s higher possible upside, equities research analysts clearly believe Avalara is more favorable than ServiceNow.
This table compares Avalara and ServiceNow’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Avalara and ServiceNow’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Avalara||$213.15 million||11.38||-$64.12 million||N/A||N/A|
|ServiceNow||$1.93 billion||17.05||-$149.13 million||($1.05)||-176.36|
Avalara has higher earnings, but lower revenue than ServiceNow.
ServiceNow beats Avalara on 7 of the 12 factors compared between the two stocks.
Avalara, Inc. provides transaction tax compliance cloud-based solutions worldwide. It offers a suite of compliance solutions that enable businesses to address the complexity of transaction tax compliance; process transactions in real time; produce detailed records of transaction tax determinations; and reduce errors, audit exposure, and total transaction tax compliance costs. The company's solutions include AvaTax, a solution for determining sales tax in the United States; Avalara Returns for tax return preparation, filing, and remittance; and Avalara Compliance Document Management solution, which creates, validates, stores, and manages sales tax exemption and reseller certificates. It also provides professional services, including nexus studies and analysis, voluntary compliance initiatives, tax registrations, and specialized tax research; MatrixMaster, a product taxability database for retail operations; Avalara CloudConnect, a hardware device; VAT Expert, a web-based solution that checks the validity of customer and supplier VAT numbers and provides VAT determinations in the form of invoices; and Brazilian tax compliance solutions that address the Brazilian transaction tax regimes. The company was formerly known as Advantage Solutions, Inc. and changed its name to Avalara, Inc. in December 2005. Avalara, Inc. was incorporated in 1999 and is headquartered in Seattle, Washington.
ServiceNow, Inc. provides enterprise cloud computing solutions that define, structure, manage, and automate services for enterprises worldwide. The company offers service management solutions for customer service, human resources, security operations, and other enterprise departments. It operates ServiceNow platform that provides workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption, and collaboration and development tools. The company also provides information technology (IT) solutions, such as IT service management product suite for enterprise's employees, customers, and partners; IT operations management that connects a customer's physical and cloud-based IT infrastructure with applications and platforms; and IT business management product suite that enables customers to manage their IT priorities. In addition, it offers customer service management product for customer service cases and requests; human resources service delivery product; and security operations product for security operations management requirements of third-party. Further, the company provides professional services, training services and certification programs, and customer support services. It serves enterprises in various industries, including financial services, consumer products, IT services, healthcare, government, education, and technology. The company sells products through its direct sales team, as well as indirectly through third-party channels by partnering with systems integrators, managed services providers, and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.
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