Critical Review: Nutanix (NASDAQ:NTNX) vs. EPAM Systems (NYSE:EPAM)

EPAM Systems (NYSE:EPAM) and Nutanix (NASDAQ:NTNX) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Insider and Institutional Ownership

91.6% of EPAM Systems shares are owned by institutional investors. Comparatively, 85.3% of Nutanix shares are owned by institutional investors. 4.3% of EPAM Systems shares are owned by company insiders. Comparatively, 6.8% of Nutanix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for EPAM Systems and Nutanix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EPAM Systems	0	4	13	0	2.76
Nutanix	0	2	14	1	2.94

EPAM Systems presently has a consensus target price of $224.06, indicating a potential upside of 45.80%. Nutanix has a consensus target price of $89.07, indicating a potential upside of 14.69%. Given EPAM Systems’ higher possible upside, analysts plainly believe EPAM Systems is more favorable than Nutanix.

Profitability

This table compares EPAM Systems and Nutanix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EPAM Systems	7.91%	14.00%	10.89%
Nutanix	7.42%	-27.63%	7.37%

Risk & Volatility

EPAM Systems has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Nutanix has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500.

Earnings & Valuation

This table compares EPAM Systems and Nutanix”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EPAM Systems	$4.73 billion	1.81	$454.53 million	$7.01	21.92
Nutanix	$2.54 billion	8.20	$188.37 million	$0.64	121.34

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

Summary

EPAM Systems beats Nutanix on 9 of the 15 factors compared between the two stocks.

About EPAM Systems

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, performance tuning, deployment, maintenance, and support services. It also provides operation solutions comprising integrated engineering practices and smart automation services. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. The company serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries EPAM Systems, Inc. was founded in 1993 and is headquartered in Newtown, Pennsylvania.

About Nutanix

Nutanix, Inc. engages in the provision of a cloud platform leveraging web-scale engineering and consumer-grade design. It operates through the following geographic segments: United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas. The firm also provides software solutions and cloud services to customers’ enterprise infrastructure. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.