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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EPAM Systems 0 0 12 0 3.00
Zix Corporation 0 1 1 0 2.50

EPAM Systems currently has a consensus target price of $95.75, suggesting a potential downside of 3.93%. Zix Corporation has a consensus target price of $6.75, suggesting a potential upside of 42.71%. Given Zix Corporation’s higher possible upside, analysts clearly believe Zix Corporation is more favorable than EPAM Systems.

Earnings & Valuation

This table compares EPAM Systems and Zix Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
EPAM Systems $1.16 billion 4.51 $99.26 million $2.35 42.41
Zix Corporation $60.14 million 4.34 $5.83 million $0.12 39.42

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

Risk and Volatility

EPAM Systems has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Zix Corporation has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
EPAM Systems 10.71% 17.08% 14.50%
Zix Corporation 10.49% 16.07% 9.72%

Institutional and Insider Ownership

87.9% of EPAM Systems shares are held by institutional investors. Comparatively, 68.1% of Zix Corporation shares are held by institutional investors. 6.2% of EPAM Systems shares are held by company insiders. Comparatively, 4.5% of Zix Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

EPAM Systems beats Zix Corporation on 12 of the 14 factors compared between the two stocks.

About EPAM Systems

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.

About Zix Corporation

Zix Corporation offers e-mail encryption, data loss prevention and bring-your-own-device (BYOD) security to meet business data protection and compliance needs. The Company operates through e-mail encryption and security solutions. Its Zix Email Encryption enables the secure exchange of e-mails that include sensitive information through a secure messaging service. It offers ZixDirectory, an e-mail encryption community that is designed to share identities of its members; Best Method of Delivery, which is designed to deliver e-mail, and ZixGateway, which automatically encrypts and decrypts messages with sensitive content. ZixCorp delivers over 1.5 million encrypted messages on a typical business day. On an average, 70% of those encrypted messages are exchanged between senders and recipients. It also offers ZixQuarantine, an e-mail-specific solution. Its ZixOne is a mobile e-mail application that solves the information technology (IT) challenge created by the BYOD trend in the workplace.

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