WalkMe (NASDAQ:WKME) & Rapid7 (NASDAQ:RPD) Critical Analysis

WalkMe (NASDAQ:WKME) and Rapid7 (NASDAQ:RPD) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Volatility & Risk

WalkMe has a beta of -0.24, suggesting that its stock price is 124% less volatile than the S&P 500. Comparatively, Rapid7 has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Profitability

This table compares WalkMe and Rapid7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WalkMe	-25.42%	-671.05%	-14.73%
Rapid7	-23.87%	N/A	-2.33%

Earnings and Valuation

This table compares WalkMe and Rapid7’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WalkMe	$245.01 million	N/A	-$92.63 million	($0.77)	-13.23
Rapid7	$756.92 million	4.17	-$124.72 million	($2.97)	-17.44

WalkMe has higher earnings, but lower revenue than Rapid7. Rapid7 is trading at a lower price-to-earnings ratio than WalkMe, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.7% of Rapid7 shares are held by institutional investors. 27.6% of WalkMe shares are held by company insiders. Comparatively, 2.6% of Rapid7 shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for WalkMe and Rapid7, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WalkMe	0	3	3	0	2.50
Rapid7	0	10	5	0	2.33

WalkMe currently has a consensus price target of $13.29, suggesting a potential upside of 30.38%. Rapid7 has a consensus price target of $52.07, suggesting a potential upside of 0.51%. Given WalkMe’s stronger consensus rating and higher probable upside, analysts clearly believe WalkMe is more favorable than Rapid7.

Summary

Rapid7 beats WalkMe on 7 of the 13 factors compared between the two stocks.

About WalkMe

WalkMe Ltd. provides cloud-based digital adaption platform and associated professional services in the United States and internationally. The company's digital transformation intelligence provides software stack, actionable insights, and data services. It also provides workflows and applications in the form of UI elements. In addition, the company creates a transparent layer for the end-user across any software to ensure immediate and intuitive access to any application, workflow, or resource and can be used by web, mobile, and desktop. The company was formerly known as Make Tutorial Ltd. and changed its name to WalkMe Ltd. in March 2012. WalkMe Ltd. was incorporated in 2011 and is headquartered in Tel Aviv, Israel.

About Rapid7

Rapid7, Inc. provides cybersecurity solutions. The company offers a cloud-native insight platform that enables customers to create and manage analytics-driven cybersecurity risk management programs. Its platform includes InsightIDR, an incident detection and response solution; InsightCloudSec, a cloud risk and compliance management platform; InsightVM helps organizations to discover and remediate vulnerability risk across their network; InsightAppSec that provides dynamic application security testing; and InsightConnect, a security orchestration and automation response solution. The company also provides Threat Intelligence that finds and mitigates threats; Nexpose, an on-premise version of company's vulnerability risk management solution; AppSpider, an on-premise version of company's application security testing solution; and Metasploit, an industry-leading penetration testing software solution, as well as professional services. The company serves customers in a range of industries, including technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.