Luxoft (NYSE: LXFT) and EPAM Systems (NYSE:EPAM) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.
Risk & Volatility
Luxoft has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, EPAM Systems has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Luxoft and EPAM Systems, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Luxoft presently has a consensus price target of $57.70, suggesting a potential upside of 45.34%. EPAM Systems has a consensus price target of $115.53, suggesting a potential upside of 1.30%. Given Luxoft’s higher probable upside, research analysts plainly believe Luxoft is more favorable than EPAM Systems.
Insider and Institutional Ownership
54.0% of Luxoft shares are held by institutional investors. Comparatively, 91.5% of EPAM Systems shares are held by institutional investors. 6.2% of EPAM Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Luxoft and EPAM Systems’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Luxoft||$785.56 million||1.71||$62.63 million||$2.14||18.55|
|EPAM Systems||$1.45 billion||4.17||$72.76 million||$2.85||40.02|
EPAM Systems has higher revenue and earnings than Luxoft. Luxoft is trading at a lower price-to-earnings ratio than EPAM Systems, indicating that it is currently the more affordable of the two stocks.
This table compares Luxoft and EPAM Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
EPAM Systems beats Luxoft on 10 of the 14 factors compared between the two stocks.
Luxoft Holding, Inc., together with its subsidiaries, provides software development services and IT solutions to multinational corporations primarily in Europe and the United States. It offers application software development, software architecture design, performance engineering, optimization and testing, process consulting, and software quality assurance services; functional specification and mock-up, product design, engineering, automated testing, maintenance, support, and performance engineering services; and IT strategy, software engineering process, and data security consulting services. The company's products and platforms include Teora, a suite of developer tools designed to enable automotive human machine interface (HMI) developers build the logic of their user interface; Populus, a tool chain for HMI design and development, and the deployment of automotive user interfaces for distributed embedded systems; and AllView, a user-experience demonstrator that links instrument cluster, head unit, head-up display, and mobile devices. It serves financial services, automotive and transport, travel and aviation, technology, telecom, healthcare and pharmaceutical, energy, and other industries. The company was founded in 2000 and is headquartered in Zug, Switzerland.
About EPAM Systems
EPAM Systems, Inc. provides software product development and digital platform engineering services primarily in North America, Europe, Asia, and Australia. It offers software product development services, including product research, customer experience design, prototyping, program management, component design and integration, lifecycle software testing, product deployment, end-user customization, performance tuning, product support and maintenance, managed services, and porting and cross-platform migration. The company provides custom application development services, such as business and technical requirement analysis, user experience design, solution architecture creation and validation, development, component design and integration, quality assurance and testing, deployment, performance tuning, support and maintenance, legacy applications re-engineering/refactoring, porting and cross-platform migration, and documentation. It also offers application testing services, including software application testing, testing for enterprise IT, and consulting services; application maintenance and support services, such as incident management, fault investigation diagnosis, work-around provision, application bug fixes, release management, enhancements, and third-party maintenance; and infrastructure management services comprising application, database, network, server, storage, and systems operations management, as well as incident notification and resolutions. In addition, it provides enterprise information management services. It serves customers in financial service, travel and consumer, software, hi-tech, media and entertainment, and life sciences and healthcare industries. The company was founded in 1993 and is headquartered in Newtown, Pennsylvania.
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