Critical Contrast: SecureWorks (NASDAQ:SCWX) versus ZoomInfo Technologies (NASDAQ:ZI)

SecureWorks (NASDAQ:SCWXGet Rating) and ZoomInfo Technologies (NASDAQ:ZIGet Rating) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

10.7% of SecureWorks shares are owned by institutional investors. Comparatively, 91.4% of ZoomInfo Technologies shares are owned by institutional investors. 85.3% of SecureWorks shares are owned by company insiders. Comparatively, 9.7% of ZoomInfo Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares SecureWorks and ZoomInfo Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SecureWorks $535.21 million 1.38 -$39.79 million ($0.81) -10.70
ZoomInfo Technologies $747.20 million 22.67 $116.80 million $0.27 155.52

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

Profitability

This table compares SecureWorks and ZoomInfo Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SecureWorks -13.62% -6.81% -4.52%
ZoomInfo Technologies 13.61% 7.16% 2.09%

Analyst Ratings

This is a breakdown of recent ratings and price targets for SecureWorks and ZoomInfo Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SecureWorks 2 3 0 0 1.60
ZoomInfo Technologies 0 0 15 0 3.00

SecureWorks presently has a consensus price target of $14.00, suggesting a potential upside of 61.48%. ZoomInfo Technologies has a consensus price target of $68.41, suggesting a potential upside of 62.92%. Given ZoomInfo Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe ZoomInfo Technologies is more favorable than SecureWorks.

Risk & Volatility

SecureWorks has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, ZoomInfo Technologies has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Summary

ZoomInfo Technologies beats SecureWorks on 13 of the 14 factors compared between the two stocks.

About SecureWorks

(Get Rating)

SecureWorks Corp., through its subsidiaries, provides technology-driven information security solutions for protecting its customers in the United States and internationally. The company's solutions include software-as-a-service solutions, managed security services, and professional services, including incident response and security risk consulting services. Its solutions enable organizations to prevent security breaches, detect malicious activity, respond rapidly to security breaches, and identify emerging threats. The company sells its solutions primarily through its direct sales organization, as well as through referral agents, regional value-added resellers, and trade associations. It serves customers in a range of industries, including financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. SecureWorks Corp. was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. operates as a subsidiary of Dell Marketing L.P.

About ZoomInfo Technologies

(Get Rating)

ZoomInfo Technologies Inc., through its subsidiaries, provides go-to-market intelligence and engagement platform for sales and marketing teams in the United States and internationally. The company's cloud-based platform provides information on organizations and professionals to help users identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage through automated sales tools, and track progress through the deal cycle. It serves enterprises, mid-market companies, and down to small businesses that operate in various industry verticals, including software, business services, manufacturing, telecommunications, financial services, media and internet, transportation, education, hospitality, and real estate. ZoomInfo Technologies Inc. was founded in 2007 and is headquartered in Vancouver, Washington.

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