EPAM Systems (NYSE: EPAM) and NetScout Systems (NASDAQ:NTCT) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Valuation & Earnings

This table compares EPAM Systems and NetScout Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EPAM Systems $1.29 billion 3.64 $183.54 million $2.07 43.15
NetScout Systems $1.12 billion 2.57 $201.03 million $0.19 169.48

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

Analyst Recommendations

This is a summary of current recommendations and price targets for EPAM Systems and NetScout Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EPAM Systems 0 0 11 0 3.00
NetScout Systems 0 2 1 0 2.33

EPAM Systems currently has a consensus price target of $91.27, indicating a potential upside of 2.17%. NetScout Systems has a consensus price target of $39.50, indicating a potential upside of 22.67%. Given NetScout Systems’ higher probable upside, analysts plainly believe NetScout Systems is more favorable than EPAM Systems.

Institutional and Insider Ownership

87.9% of EPAM Systems shares are held by institutional investors. 6.2% of EPAM Systems shares are held by insiders. Comparatively, 3.5% of NetScout Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
EPAM Systems 8.71% 15.12% 12.73%
NetScout Systems 1.60% 5.53% 3.77%

Risk and Volatility

EPAM Systems has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, NetScout Systems has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.

Summary

EPAM Systems beats NetScout Systems on 11 of the 14 factors compared between the two stocks.

EPAM Systems Company Profile

EPAM Systems, Inc. is a g provider of software product development and digital platform engineering services to clients located primarily in North America, Europe, Asia and Australia. The Company’s service offerings cover the full software product development lifecycle from digital strategy and customer experience design to enterprise application platforms implementation and program management services and from complex software development services to maintenance, support, custom application development, application testing, and infrastructure management. Its service offerings include Software Product Development Services, Custom Application Development Services, Application Testing Services, Enterprise Application Platforms, Application Maintenance and Support, and Infrastructure Management Services. It offers its solutions and services to industries, such as financial services, media and entertainment, travel and consumer, software and hi-tech, and life sciences and healthcare.

NetScout Systems Company Profile

NetScout Systems, Inc. (NetScout) provides operational intelligence and performance analytics for service assurance and cyber security solutions. The Company’s solutions are used in various service provider, enterprise and government networks. Its nGenius and Infinistream technologies, along with certain product lines from the acquired businesses, enable information technology (IT) organizations to manage service delivery quality, and identify and address business service performance issues and security threats. The Company’s manufacturing operations consist of final product assembly, configuration and testing. The Company’s nGeniusONE Service Assurance Solution is used to support NetScout’s enterprise, service provider and government customers. The Company’s Intelligent Data Sources, marketed under the Infinistream brand, provide collection and analysis of high-volume packet-flow data from across the network that is displayed through the nGeniusONE Service Assurance Solution.

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