Critical Comparison: Hortonworks (HDP) and QAD Inc. Class A (QADA)

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Hortonworks (NASDAQ: HDP) and QAD Inc. Class A (NASDAQ:QADA) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

66.2% of Hortonworks shares are owned by institutional investors. Comparatively, 46.4% of QAD Inc. Class A shares are owned by institutional investors. 15.6% of Hortonworks shares are owned by company insiders. Comparatively, 43.7% of QAD Inc. Class A shares 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.

Dividends

QAD Inc. Class A pays an annual dividend of $0.29 per share and has a dividend yield of 0.6%. Hortonworks does not pay a dividend. QAD Inc. Class A pays out -61.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Hortonworks and QAD Inc. Class A’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hortonworks $261.81 million 6.56 -$204.50 million ($3.06) -7.10
QAD Inc. Class A $305.02 million 3.33 -$9.06 million ($0.47) -111.17

QAD Inc. Class A has higher revenue and earnings than Hortonworks. QAD Inc. Class A is trading at a lower price-to-earnings ratio than Hortonworks, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Hortonworks and QAD Inc. Class A, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hortonworks 0 2 11 0 2.85
QAD Inc. Class A 0 0 3 0 3.00

Hortonworks currently has a consensus price target of $25.00, suggesting a potential upside of 15.05%. QAD Inc. Class A has a consensus price target of $58.00, suggesting a potential upside of 11.00%. Given Hortonworks’ higher possible upside, research analysts clearly believe Hortonworks is more favorable than QAD Inc. Class A.

Profitability

This table compares Hortonworks and QAD Inc. Class A’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hortonworks -57.16% N/A -70.60%
QAD Inc. Class A -1.59% -4.54% -1.85%

Volatility & Risk

Hortonworks has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, QAD Inc. Class A has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Summary

QAD Inc. Class A beats Hortonworks on 9 of the 15 factors compared between the two stocks.

Hortonworks Company Profile

Hortonworks, Inc. provides data management platforms, services, and solutions in North America, the Asia Pacific, Europe, and Latin America. It offers Hortonworks Data Platform (HDP), an enterprise-scale data management platform which provides a platform for multi-workload data processing; Hortonworks DataFlow, a data-in-motion platform to automate and secure Internet of anything data flows, as well as to collect, conduct, and curate real-time business insights and actions derived from data in motion, including sensors, machines, geolocation devices, clicks, server logs, and social feeds; and Hortonworks DataPlane Service simplifies managing, securing, governing, provisioning, and consuming distributed data systems. The company also provides Azure HDInsight, a data cloud service that provides customers flexible big data environments on the Azure cloud; Hortonworks Data Cloud for Amazon Web Services, a big data cloud service for analyzing and processing data, and enabling businesses to achieve insights quickly and with flexibility; Hortonworks Cybersecurity Platform (HCP) offers view of business risk through a security lens; and Hortonworks Sandbox, a personal, portable, and free to use Hadoop environment designed to offer the easiest way to get started with HDP or HDF. In addition, it offers support subscription, consulting, and education services. Further, the company's connected data platforms are primarily provided under the Apache open source license with rights to use, copy, modify, and redistribute the software. It sells its products through direct sales team and reseller partners. Hortonworks, Inc. was founded in 2011 and is headquartered in Santa Clara, California.

QAD Inc. Class A Company Profile

QAD Inc. provides enterprise software solutions for manufacturing companies in the automotive, life sciences, consumer products, food and beverage, high technology, and industrial products industries worldwide. The company offers QAD Enterprise Applications, an integrated suite of software applications, which support the core business processes. Its QAD Enterprise Applications include software solutions, such as QAD Financials to manage and control finance and accounting processes; QAD Customer Management for manufacturers to acquire new customers; QAD Manufacturing, which supports manufacturing business processes; QAD Automation Solutions that improve manufacturers' material transaction processing; QAD Demand and Supply Chain Planning that fulfills materials planning and logistics requirements; QAD Supply Chain Execution that offers tools to support inventory and warehouse management; and QAD Transportation Management to manage and optimize outside carriers for shipments. The company's QAD Enterprise Applications also comprise suites, such as QAD Service and Support that handles service calls, manages service queues, and organizes mobile field resources; QAD Enterprise Asset Management to manage, maintain, and install capital equipment; Action Centers with Embedded Analytics; and QAD Analytics that provides data to measure performance. It also offers QAD Enterprise Quality Management that provides quality management and regulatory compliance solutions; QAD Interoperability, which integrates QAD Enterprise Applications with other non-QAD core business applications; and QAD Internationalization, which supports companies that manufacture and distribute their products worldwide. In addition, it provides customer support, product updates, maintenance, and professional services. The company markets its products through direct and indirect sales channels; and distributors and sales agents. QAD Inc. was founded in 1979 and is headquartered in Santa Barbara, California.

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