Luxoft (NYSE: LXFT) and Benefitfocus (NASDAQ:BNFT) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Institutional & Insider Ownership
50.7% of Luxoft shares are owned by institutional investors. Comparatively, 85.7% of Benefitfocus shares are owned by institutional investors. 40.1% of Benefitfocus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Luxoft has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Benefitfocus has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.
Earnings and Valuation
This table compares Luxoft and Benefitfocus’ 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||2.51||$62.63 million||$1.67||34.97|
|Benefitfocus||$233.34 million||3.40||-$40.05 million||($0.84)||-30.24|
Luxoft has higher revenue and earnings than Benefitfocus. Benefitfocus is trading at a lower price-to-earnings ratio than Luxoft, indicating that it is currently the more affordable of the two stocks.
This table compares Luxoft and Benefitfocus’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for Luxoft and Benefitfocus, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Luxoft currently has a consensus target price of $65.00, indicating a potential upside of 11.30%. Benefitfocus has a consensus target price of $35.00, indicating a potential upside of 37.80%. Given Benefitfocus’ higher probable upside, analysts plainly believe Benefitfocus is more favorable than Luxoft.
Luxoft beats Benefitfocus on 9 of the 13 factors compared between the two stocks.
Luxoft Holding, Inc., is a provider of software development services and information technology (IT) solutions to a global client base consisting primarily of large multinational corporations. The Company’s software development services consist of custom software development and support, product engineering and testing, and technology consulting. The Company’s solutions are based on its proprietary products and platforms that directly impact its clients’ business outcomes and efficiently deliver continuous innovation. The Company develops its solutions and delivers its services from 34 cities with delivery centers worldwide. Its products and platforms include Horizon, SuperCloud, Twister, iStockTrack, TEORA, Populus, AllView, CVNAR and Retail Engagement Suite (RES) in Internet of Things (IoT) space.
Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.
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