Comparing Clearwater Analytics (NYSE:CWAN) & Evolent Health (NYSE:EVH)

Clearwater Analytics (NYSE:CWAN) and Evolent Health (NYSE:EVH) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Institutional & Insider Ownership

50.1% of Clearwater Analytics shares are held by institutional investors. 3.3% of Clearwater Analytics shares are held by insiders. Comparatively, 1.4% of Evolent Health shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Clearwater Analytics and Evolent Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clearwater Analytics	73.74%	3.23%	2.44%
Evolent Health	-5.94%	1.83%	0.70%

Earnings & Valuation

This table compares Clearwater Analytics and Evolent Health”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clearwater Analytics	$451.80 million	12.51	$424.38 million	$1.59	12.15
Evolent Health	$2.55 billion	0.40	-$61.62 million	($1.61)	-5.43

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

Analyst Ratings

This is a summary of current ratings and target prices for Clearwater Analytics and Evolent Health, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clearwater Analytics	0	1	9	0	2.90
Evolent Health	0	1	12	1	3.00

Clearwater Analytics currently has a consensus price target of $32.67, indicating a potential upside of 69.08%. Evolent Health has a consensus price target of $17.43, indicating a potential upside of 99.18%. Given Evolent Health’s stronger consensus rating and higher possible upside, analysts clearly believe Evolent Health is more favorable than Clearwater Analytics.

Volatility and Risk

Clearwater Analytics has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Evolent Health has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Summary

Clearwater Analytics beats Evolent Health on 9 of the 14 factors compared between the two stocks.

About Clearwater Analytics

Clearwater Analytics Holdings, Inc. develops and provides a Software-as-a-Service (SaaS) solution for automated investment data aggregation, reconciliation, accounting, and reporting services to insurers, investment managers, corporations, institutional investors, and government entities in the United States and internationally. It offers investment accounting and reporting, performance measurement, compliance monitoring, and risk analytics solutions. The company’s Clearwater Prism SaaS-based data and reporting platform for investment data delivers a range of product modules, including Prism reporting and statements, Prism connectors, Prism data ops, and Prism managed services. It also provides Clearwater JUMP that provides a modular front, middle and back office solution to investment managers, private banks, and insurer, as well as portfolio management and order management, unit-linked funds, tri-partite templates, and full trade life cycle solutions. In addition, the company offers Clearwater LPx, a full-service solution for private funds that delivers complete, timely, accurate, and consumable data for limited partnerships; and Clearwater MLx, a comprehensive mortgage loan investment solution that provides investors to drive growth and make informed decisions, oversight, and reporting capabilities for mortgage loan investments, as well as enhances risk reporting, servicer tracking, oversight, and accounting capabilities. The company was founded in 2004 and is headquartered in Boise, Idaho.

About Evolent Health

Evolent Health, Inc., through its subsidiary, Evolent Health LLC, offers specialty care management services in oncology, cardiology, and musculoskeletal markets in the United States. The company provides platform for health plan administration and value-based business infrastructure. It offers administrative services, such as health plan services, pharmacy benefits management, risk management, analytics and reporting, and leadership and management; and Identifi, a proprietary technology system that aggregates and analyzes data, manages care workflows, and engages patients. In addition, the company provides holistic total cost of care management. Evolent Health, Inc. was founded in 2011 and is headquartered in Arlington, Virginia.