EPAM Systems (NYSE:EPAM) and Dynatrace (NYSE:DT) Head-To-Head Review

Dynatrace (NYSE:DT) and EPAM Systems (NYSE:EPAM) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

94.3% of Dynatrace shares are owned by institutional investors. Comparatively, 91.6% of EPAM Systems shares are owned by institutional investors. 0.6% of Dynatrace shares are owned by company insiders. Comparatively, 4.3% of EPAM Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Dynatrace has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, EPAM Systems has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dynatrace and EPAM Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynatrace	0	6	18	0	2.75
EPAM Systems	0	6	10	1	2.71

Dynatrace currently has a consensus target price of $59.96, suggesting a potential upside of 46.88%. EPAM Systems has a consensus target price of $210.53, suggesting a potential downside of 4.18%. Given Dynatrace’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Dynatrace is more favorable than EPAM Systems.

Earnings and Valuation

This table compares Dynatrace and EPAM Systems”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynatrace	$1.70 billion	7.24	$483.68 million	$1.67	24.44
EPAM Systems	$4.73 billion	2.57	$454.53 million	$6.55	33.55

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

Profitability

This table compares Dynatrace and EPAM Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynatrace	27.33%	9.24%	6.14%
EPAM Systems	7.01%	13.16%	10.15%

Summary

EPAM Systems beats Dynatrace on 8 of the 15 factors compared between the two stocks.

About Dynatrace

Dynatrace, Inc. provides a security platform for multicloud environments in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates Dynatrace, a security platform, which provides application and microservices monitoring, runtime application security, infrastructure monitoring, log management and analytics, digital experience monitoring, digital business analytics, and cloud automation. Its platform allows its customers to modernize and automate IT operations, delivers software, and enhance user experiences. In addition, the company offers implementation, consulting, and training services. It markets its products through a combination of direct sales team and a network of partners, including resellers, system integrators, and managed service providers. It serves customers in various industries comprising banking, financial services, government, insurance, retail and wholesale, transportation, and software. Dynatrace, Inc. was founded in 2005 and is headquartered in Waltham, Massachusetts.

About EPAM Systems

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, performance tuning, deployment, maintenance, and support services. It also provides operation solutions comprising integrated engineering practices and smart automation services. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. The company serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries EPAM Systems, Inc. was founded in 1993 and is headquartered in Newtown, Pennsylvania.