Luxoft (NASDAQ: SYNT) and Syntel (NASDAQ:SYNT) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Valuation and Earnings

This table compares Luxoft and Syntel’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luxoft $906.77 million 1.75 $57.01 million $2.09 22.51
Syntel $923.83 million 3.68 $166.26 million $2.02 20.26

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

Insider & Institutional Ownership

54.9% of Luxoft shares are held by institutional investors. Comparatively, 40.8% of Syntel shares are held by institutional investors. 58.1% of Syntel shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Luxoft and Syntel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luxoft 0 5 5 0 2.50
Syntel 2 10 0 0 1.83

Luxoft currently has a consensus price target of $50.50, suggesting a potential upside of 7.33%. Syntel has a consensus price target of $27.29, suggesting a potential downside of 33.32%. Given Luxoft’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Luxoft is more favorable than Syntel.

Profitability

This table compares Luxoft and Syntel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luxoft 6.09% 15.44% 11.90%
Syntel 18.42% 3,237.31% 38.35%

Volatility and Risk

Luxoft has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Syntel has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Luxoft Company Profile

Luxoft Holding, Inc., together with its subsidiaries, provides software development services and IT solutions to multinational corporations primarily in Europe and the United States. It offers application software development, software architecture design, performance engineering, optimization and testing, process consulting, and software quality assurance services; functional specification and mock-up, product design, engineering, automated testing, maintenance, support, and performance engineering services; and IT strategy, software engineering process, and data security consulting services. The company's products and platforms include Teora, a suite of developer tools designed to enable automotive human machine interface (HMI) developers build the logic of their user interface; Populus, a tool chain for HMI design and development, and the deployment of automotive user interfaces for distributed embedded systems; and AllView, a user-experience demonstrator that links instrument cluster, head unit, head-up display, and mobile devices. It serves financial services, automotive and transport, travel and aviation, technology, telecom, healthcare and pharmaceutical, energy, and other industries. The company was founded in 2000 and is headquartered in Zug, Switzerland.

Syntel Company Profile

Syntel, Inc. provides digital transformation, information technology (IT), and knowledge process outsourcing (KPO) services worldwide. The company operates through Banking and Financial Services; Healthcare and Life Sciences; Insurance; Manufacturing; and Retail, Logistics, and Telecom segments. It provides end-to-end, integrated application, and infrastructure management services; develops software applications; and offers legacy modernization services, such as software analysis, language conversion, reverse engineering, database migration, code optimization, cloud onboarding and migration, ecosystem migration, testing, and management. The company also provides consulting, implementation, and management services for enterprise architecture, data warehousing, business intelligence, and enterprise application integration, as well as mobility, big data, analytics, and Internet of Things technologies. In addition, it offers KPO services that provide outsourced solutions for knowledge and business processes. The company offers its products to various companies in the banking and financial services, healthcare and life sciences, insurance, manufacturing, retail, logistics, and telecom industries. Syntel, Inc. was founded in 1980 and is headquartered in Troy, Michigan.

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