Analyzing Check Point Software Technologies (CHKP) & Rosetta Stone (RST)

Check Point Software Technologies (NASDAQ: CHKP) and Rosetta Stone (NYSE:RST) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Profitability

This table compares Check Point Software Technologies and Rosetta Stone’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Check Point Software Technologies 42.17% 22.02% 14.91%
Rosetta Stone -6.06% -926.26% -4.89%

Analyst Recommendations

This is a summary of recent ratings and price targets for Check Point Software Technologies and Rosetta Stone, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Check Point Software Technologies 0 16 14 0 2.47
Rosetta Stone 0 0 1 0 3.00

Check Point Software Technologies currently has a consensus target price of $111.24, suggesting a potential downside of 1.30%. Rosetta Stone has a consensus target price of $15.00, suggesting a potential upside of 64.84%. Given Rosetta Stone’s stronger consensus rating and higher probable upside, analysts plainly believe Rosetta Stone is more favorable than Check Point Software Technologies.

Valuation & Earnings

This table compares Check Point Software Technologies and Rosetta Stone’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Check Point Software Technologies $1.81 billion 10.17 $893.47 million $4.50 25.04
Rosetta Stone $193.97 million 1.05 $2.56 million ($0.53) -17.17

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

Institutional and Insider Ownership

67.8% of Check Point Software Technologies shares are owned by institutional investors. Comparatively, 73.0% of Rosetta Stone shares are owned by institutional investors. 29.0% of Check Point Software Technologies shares are owned by company insiders. Comparatively, 14.5% of Rosetta Stone shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Check Point Software Technologies has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Rosetta Stone has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Summary

Check Point Software Technologies beats Rosetta Stone on 9 of the 13 factors compared between the two stocks.

Check Point Software Technologies Company Profile

Check Point Software Technologies Ltd. (Check point) develops, markets and supports a range of products and services for information technology (IT) security. The Company’s products and services are sold to enterprises, service providers, small and medium sized businesses and consumers. It offers enterprises a platform to deploy independent, modular and interoperable security applications (Software Blades), such as firewall, virtual private network (VPN), intrusion prevention system (IPS), Application Control, Anti-Bot, antivirus, data loss prevention (DLP), policy management, event analysis or multi-domain management. The Company offers Software Blades grouped into functional packages to address specific security issues. It has product offerings under these packages, which include Next Generation Firewall, Next Generation Threat Prevention, Next Generation Secure Web Gateway and Next Generation Data Protection.

Rosetta Stone Company Profile

Rosetta Stone Inc. (Rosetta Stone) offers personalized language and reading programs. The Company’s solutions are used by schools, businesses, government organizations and individuals around the world. Its segments include Enterprise & Education, which derives revenues from sales to educational institutions, corporations and government agencies worldwide, and Consumer, which derives revenue from sales to individuals and retail partners. Its cloud-based programs allow users to learn online or on-the-go via tablet or smartphone, whether in a classroom, corporate setting, or personal learning environment. Its Fit Brains business offers personalized brain training programs. The Company offers courses in over 30 languages across formats, including Web-based software subscriptions, digital downloads, mobile applications, and perpetual compact disc packages. It also offers a portfolio of technology-based learning products for personal use to the global consumer.

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