Contrasting Rosetta Stone (RST) & The Competition

Rosetta Stone (NYSE: RST) is one of 65 public companies in the “Application Software” industry, but how does it contrast to its rivals? We will compare Rosetta Stone to related companies based on the strength of its institutional ownership, risk, analyst recommendations, dividends, valuation, profitability and earnings.

Volatility & Risk

Rosetta Stone has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Rosetta Stone’s rivals have a beta of 1.61, indicating that their average share price is 61% more volatile than the S&P 500.

Insider and Institutional Ownership

73.4% of Rosetta Stone shares are owned by institutional investors. Comparatively, 68.5% of shares of all “Application Software” companies are owned by institutional investors. 14.5% of Rosetta Stone shares are owned by insiders. Comparatively, 15.7% of shares of all “Application Software” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Rosetta Stone and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rosetta Stone -6.06% -926.26% -4.89%
Rosetta Stone Competitors -66.89% -94.61% -18.59%

Analyst Ratings

This is a breakdown of recent recommendations for Rosetta Stone and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rosetta Stone 0 0 1 0 3.00
Rosetta Stone Competitors 181 1520 2911 98 2.62

Rosetta Stone currently has a consensus target price of $15.00, indicating a potential upside of 50.91%. As a group, “Application Software” companies have a potential upside of 2.80%. Given Rosetta Stone’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Rosetta Stone is more favorable than its rivals.

Earnings and Valuation

This table compares Rosetta Stone and its rivals revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Rosetta Stone $193.97 million $2.56 million -18.75
Rosetta Stone Competitors $761.46 million $137.65 million 35.73

Rosetta Stone’s rivals have higher revenue and earnings than Rosetta Stone. Rosetta Stone is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

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.

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