Rosetta Stone (RST) & Sabre (SABR) Head to Head Analysis

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

Insider and Institutional Ownership

72.8% of Rosetta Stone shares are owned by institutional investors. 14.5% of Rosetta Stone shares are owned by insiders. Comparatively, 1.0% of Sabre shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Rosetta Stone and Sabre’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rosetta Stone $194.09 million 1.46 -$27.55 million ($0.42) -30.36
Sabre $3.37 billion 1.56 $242.56 million $0.69 27.72

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

Dividends

Sabre pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. Rosetta Stone does not pay a dividend. Sabre pays out 81.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Rosetta Stone and Sabre, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rosetta Stone 0 0 1 0 3.00
Sabre 2 2 5 0 2.33

Rosetta Stone presently has a consensus target price of $15.00, indicating a potential upside of 17.65%. Sabre has a consensus target price of $22.63, indicating a potential upside of 18.27%. Given Sabre’s higher possible upside, analysts plainly believe Sabre is more favorable than Rosetta Stone.

Profitability

This table compares Rosetta Stone and Sabre’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rosetta Stone -4.97% N/A -3.43%
Sabre 5.22% 53.97% 6.12%

Volatility & Risk

Rosetta Stone has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Sabre has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Summary

Sabre beats Rosetta Stone on 11 of the 16 factors compared between the two stocks.

About Rosetta Stone

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.

About Sabre

Sabre Corporation is a technology solutions provider to the global travel and tourism industry. The Company provides software and services to a range of travel suppliers and travel buyers. The Company operates through two business segments: Travel Network, and Airline and Hospitality Solutions. Travel Network is its global business-to-business travel marketplace and consists primarily of its global distribution system (GDS) and a set of solutions that integrate with its GDS to serve travel suppliers and travel buyers. Its Airline and Hospitality Solutions business offers a portfolio of software technology products and solutions, through software-as-a-service (SaaS) and hosted delivery model, to airlines, hoteliers and other travel suppliers. The Company connects travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, with travel buyers in a travel marketplace.

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