Financial Analysis: BroadSoft (BSFT) versus Conduent (CNDT)

BroadSoft (NASDAQ: BSFT) and Conduent (NYSE:CNDT) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for BroadSoft and Conduent, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BroadSoft 0 7 3 0 2.30
Conduent 0 5 3 0 2.38

BroadSoft currently has a consensus target price of $49.11, indicating a potential downside of 10.63%. Conduent has a consensus target price of $18.50, indicating a potential upside of 22.92%. Given Conduent’s stronger consensus rating and higher probable upside, analysts clearly believe Conduent is more favorable than BroadSoft.

Valuation & Earnings

This table compares BroadSoft and Conduent’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BroadSoft $340.96 million 5.10 $810,000.00 ($0.36) -152.64
Conduent $6.41 billion 0.49 -$983.00 million ($4.85) -3.10

BroadSoft has higher earnings, but lower revenue than Conduent. BroadSoft is trading at a lower price-to-earnings ratio than Conduent, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares BroadSoft and Conduent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BroadSoft -2.86% 3.78% 1.83%
Conduent -16.18% 5.45% 2.35%

Institutional and Insider Ownership

88.7% of Conduent shares are held by institutional investors. 1.5% of BroadSoft shares are held by company insiders. Comparatively, 0.0% of Conduent shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

BroadSoft Company Profile

BroadSoft, Inc. is a global provider of software and services that enable telecommunications service providers to deliver hosted, cloud-based Unified Communications (UC) to their enterprise customers. The BroadSoft Business solution is a communications and collaboration offering that enables telecommunications service providers to offer businesses and other enterprises UC features and functionalities on a cloud-delivered basis without the need for traditional premise-based private branch exchange (PBX) equipment. BroadSoft Business includes its UC-One, Team-One and CC-One applications. The capabilities of the BroadSoft Business offering can be accessed through desk phones, smartphones, tablets, laptops and personal computers. Its BroadWorks SIP Trunking solution enables service providers to provide Internet protocol (IP) interconnectivity and additional services to enterprises that already have premise-based PBXs. Its training services include systems administration and provisioning.

Conduent Company Profile

Conduent Incorporated is a provider of business process services, including transaction-intensive processing, analytics and automation services. The Company’s segments include Commercial Industries, Healthcare and Public Sector. The Commercial Industries segment provides business process services and customized solutions to clients in a range of industries (other than healthcare). The Healthcare segment provides industry-centric business process services to clients across the healthcare industry, including providers, payers, employers, pharmaceutical and life science companies and government agencies. The Public Sector segment provides government-centric business process services and subject matter experts to the United States federal, state and local and foreign governments. The Government Health Enterprise (HE) Medicaid Platform for all current state clients and Student Loan businesses are included in Other.

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