Analyzing 2U (TWOU) & Perficient (PRFT)

2U (NASDAQ: TWOU) and Perficient (NASDAQ:PRFT) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares 2U and Perficient’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
2U -12.49% -13.02% -9.97%
Perficient 3.36% 8.05% 6.15%

Insider & Institutional Ownership

99.4% of 2U shares are held by institutional investors. Comparatively, 74.8% of Perficient shares are held by institutional investors. 8.4% of 2U shares are held by company insiders. Comparatively, 3.7% of Perficient shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares 2U and Perficient’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
2U $205.86 million 16.12 -$20.68 million ($0.67) -94.82
Perficient $486.98 million 1.34 $20.45 million $0.47 39.77

Perficient has higher revenue and earnings than 2U. 2U is trading at a lower price-to-earnings ratio than Perficient, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

2U has a beta of -0.18, indicating that its stock price is 118% less volatile than the S&P 500. Comparatively, Perficient has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for 2U and Perficient, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
2U 0 0 10 0 3.00
Perficient 0 0 2 0 3.00

2U currently has a consensus price target of $63.80, indicating a potential upside of 0.42%. Perficient has a consensus price target of $21.50, indicating a potential upside of 15.03%. Given Perficient’s higher possible upside, analysts plainly believe Perficient is more favorable than 2U.

Summary

Perficient beats 2U on 8 of the 12 factors compared between the two stocks.

About 2U

2U, Inc. is a provider of an integrated solution consisting of cloud-based software-as-a-service (SaaS) combined with technology-enabled services (together, the Platform) that allows colleges and universities to deliver online degree programs. The Company’s SaaS technology consists of a learning environment (Online Campus), which acts as the hub for all student and faculty academic and social interaction, and a suite of integrated applications, which the Company uses to launch, operate and support the Company’s clients’ programs. The Company also provides a suite of technology-enabled services optimized with data analysis and machine learning techniques that support the complete lifecycle of a higher education program, including attracting students, advising students through the admissions application process, providing technical, success coaching and other support, facilitating accessibility to individuals with disabilities, and facilitating in-program field placements.

About Perficient

Perficient, Inc. is an information technology and management consulting firm. The Company’s solutions include business intelligence and analytics, commerce, content management, custom applications, platform implementations, portals and collaboration, business integration and application program interfaces, management consulting, business process management, and customer relationship management, among others. It provides services to the healthcare (pharma and life sciences), financial services (banking and insurance), retail and consumer goods, automotive and transport products, electronics and computer hardware, telecommunications, manufacturing, business services, and leisure, and media and entertainment markets, among others.

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