Open Text (NASDAQ: OTEX) and Luxoft (NYSE:LXFT) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Institutional & Insider Ownership
67.6% of Open Text shares are owned by institutional investors. Comparatively, 52.1% of Luxoft shares are owned by institutional investors. 10.6% of Open Text shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Open Text has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Luxoft has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Open Text and Luxoft, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Open Text presently has a consensus price target of $44.60, suggesting a potential upside of 29.54%. Luxoft has a consensus price target of $65.00, suggesting a potential upside of 22.99%. Given Open Text’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Open Text is more favorable than Luxoft.
Earnings & Valuation
This table compares Open Text and Luxoft’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Open Text||$2.29 billion||3.99||$1.03 billion||$0.71||48.49|
|Luxoft||$785.56 million||2.27||$62.63 million||$1.67||31.65|
Open Text has higher revenue and earnings than Luxoft. Luxoft is trading at a lower price-to-earnings ratio than Open Text, indicating that it is currently the more affordable of the two stocks.
This table compares Open Text and Luxoft’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Open Text pays an annual dividend of $0.53 per share and has a dividend yield of 1.5%. Luxoft does not pay a dividend. Open Text pays out 74.6% of its earnings in the form of a dividend.
Open Text beats Luxoft on 11 of the 16 factors compared between the two stocks.
About Open Text
Open Text Corporation provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. The Company designs, develops, markets and sells Enterprise Information Management (EIM) software and solutions. Its EIM offerings include Enterprise Content Management (ECM), Business Process Management (BPM), Customer Experience Management (CEM), Business Network, Discovery and Analytics. Its software and services allow organizations to manage the information that flows into, out of, and throughout the enterprise as part of daily operations. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment, as well as through cloud, hybrid and managed hosted services models. In addition, the Company provides solutions that facilitate the exchange of information and transactions that occur between supply chain participants.
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.
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