Critical Review: Rally Software Development (RALY) and Its Peers

Rally Software Development (NYSE: RALY) is one of 21 publicly-traded companies in the “Cloud Computing Services” industry, but how does it contrast to its rivals? We will compare Rally Software Development to related companies based on the strength of its institutional ownership, earnings, dividends, risk, valuation, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Rally Software Development and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rally Software Development 0 0 0 0 N/A
Rally Software Development Competitors 100 494 1567 45 2.71

As a group, “Cloud Computing Services” companies have a potential upside of 0.44%. Given Rally Software Development’s rivals higher possible upside, analysts clearly believe Rally Software Development has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares Rally Software Development and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Rally Software Development N/A N/A -15.35
Rally Software Development Competitors $996.80 million -$34.68 million 590.13

Rally Software Development’s rivals have higher revenue, but lower earnings than Rally Software Development. Rally Software Development is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

59.5% of shares of all “Cloud Computing Services” companies are owned by institutional investors. 20.1% of shares of all “Cloud Computing Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Rally Software Development and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rally Software Development -28.33% -54.33% -25.93%
Rally Software Development Competitors -85.34% -143.49% -20.49%

Summary

Rally Software Development rivals beat Rally Software Development on 6 of the 8 factors compared.

About Rally Software Development

Rally Software Development Corp. (Rally) is a United States-based company, which offers consulting and training services. The Company offers software as a service (SaaS) platform for organizations to manage the software development lifecycle. The Company’s solutions for Agile includes Agile University, which is an online source for Agile training, and Agile Commons, which is a collaborative Web community focused on software agility. The Company offers a range of Agile platform and products for Application Lifecycle Management (ALM). The Company’s solutions include enterprise scale agile, which consists of Flowdock and leading SAFe; analytics and metrics, which consists of Rally Insights Solution and Agile coaching; product and portfolio management, which include Agile Portfolio Management and transformation consulting, and Team Collaboration, which consists of Rally scrum team launch and test driven development. Its services include transformation consulting, training and coaching.

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