The shares of Ringcentral, Inc. (NYSE:RNG) and Jack Henry & Associates, Inc. (NASDAQ:JKHY) were among the active stocks of the last trading sessions. Ringcentral, Inc. (NYSE:RNG) soared to 2.06% closing at the price of $86.22 whereas the shares of Jack Henry & Associates, Inc. (NASDAQ:JKHY) declined -2.42% with the decrease of -3.55 points closing at the price of $143.1. Ringcentral, Inc. has currently increase 14.65% in its stock over the period of 6-months while its rival Jack Henry & Associates, Inc. added 15.41% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Ringcentral, Inc. (NYSE:RNG) is -29.7% while the ROI of Jack Henry & Associates, Inc. (NASDAQ:JKHY) is 20.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, RNG’s EBITDA Margin is -696.4 whereas JKHY’s is 24.67.
Both the profitability ratios suggest that Jack Henry & Associates, Inc. (NASDAQ:JKHY) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Ringcentral, Inc. (NYSE:RNG) reported $0.19/share EPS for the previous quarter where analysts were predicting an EPS to be $0.16/share Thus beating the analyst Estimates with a Surprise Factor of 18.8 Percent. While, Jack Henry & Associates, Inc. (NASDAQ:JKHY) reported EPS of $1.08/share in the last quarter. The analysts projected EPS of $0.93/share depicting a Surprise of 16.1 Percent.
Taking a look at Earnings per Share, Ringcentral, Inc. tends to be beating the analyst estimates more than Jack Henry & Associates, Inc.. so RNG is more profitable than JKHY.
Technical Analysis of Ringcentral, Inc. & Jack Henry & Associates, Inc.
Moving average convergence divergence (MACD) shows that Ringcentral, Inc. (NYSE:RNG) is on a PRICE RELATIVITY trend While Jack Henry & Associates, Inc. (NASDAQ:JKHY) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Ringcentral, Inc. was in BULLISH territory and Jack Henry & Associates, Inc. was in BEARISH territory.
RNG’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While JKHY’s candle is BULLISH with HIGH.
EPS Growth Rate: RNG’s 55.13% versus JKHY’s 10%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Ringcentral, Inc. (NYSE:RNG) is predicted at 55.13% while Jack Henry & Associates, Inc. (NASDAQ:JKHY) stands at 10%. These numbers suggest that RNG is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of RNG stands at 4.3 while JKHY is at 1 whereas the debt ratio of the prior is 1.24 while the debt ratio of the later is 0.
The values of the both ratios suggest that RNG is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.8 for RNG and 2.9 for JKHY which means RNG has Buy rating whereas JKHY has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for RNG is $96.2 which is 10.37% of its current price while JKHY has price target of 145.14 which is 1.41% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
RNG currently has price to earning P/E ratio of 0 whereas JKHY has 42.99 while the forward P/E ratio for the prior stands at 102.16 and for the later it depicts the value of 31.88.
The price to Book P/B for RNG is 23.43, Price to Sale is at 12.18 and for JKHY these ratios stand at 8.73 and 7.22.