Analyzing Cognizant Technology Solutions (NASDAQ:CTSH) and Nutanix (NASDAQ:NTNX)

Cognizant Technology Solutions (NASDAQ:CTSH) and Nutanix (NASDAQ:NTNX) are both large-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings for Cognizant Technology Solutions and Nutanix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	12	10	0	2.45
Nutanix	0	8	11	0	2.58

Cognizant Technology Solutions presently has a consensus price target of $73.00, indicating a potential upside of 37.32%. Nutanix has a consensus price target of $60.87, indicating a potential upside of 30.70%. Given Cognizant Technology Solutions’ higher probable upside, research analysts plainly believe Cognizant Technology Solutions is more favorable than Nutanix.

Institutional and Insider Ownership

92.4% of Cognizant Technology Solutions shares are owned by institutional investors. Comparatively, 85.3% of Nutanix shares are owned by institutional investors. 0.4% of Cognizant Technology Solutions shares are owned by company insiders. Comparatively, 2.4% of Nutanix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Cognizant Technology Solutions has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Nutanix has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Profitability

This table compares Cognizant Technology Solutions and Nutanix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognizant Technology Solutions	10.41%	17.50%	12.94%
Nutanix	9.95%	-37.41%	8.37%

Earnings & Valuation

This table compares Cognizant Technology Solutions and Nutanix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognizant Technology Solutions	$21.11 billion	1.19	$2.23 billion	$4.60	11.56
Nutanix	$2.54 billion	4.87	$188.37 million	$0.92	50.62

Cognizant Technology Solutions has higher revenue and earnings than Nutanix. Cognizant Technology Solutions is trading at a lower price-to-earnings ratio than Nutanix, indicating that it is currently the more affordable of the two stocks.

Summary

Cognizant Technology Solutions beats Nutanix on 9 of the 14 factors compared between the two stocks.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.

About Nutanix

Nutanix, Inc. engages in the provision of a cloud platform leveraging web-scale engineering and consumer-grade design. It operates through the following geographic segments: United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas. The firm also provides software solutions and cloud services to customers’ enterprise infrastructure. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.