Critical Survey: CDW (NASDAQ:CDW) and Nutanix (NASDAQ:NTNX)

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

Volatility & Risk

Nutanix has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, CDW has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Nutanix and CDW, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nutanix	0	8	10	0	2.56
CDW	0	3	5	1	2.78

Nutanix presently has a consensus target price of $60.00, suggesting a potential upside of 8.17%. CDW has a consensus target price of $146.88, suggesting a potential upside of 5.38%. Given Nutanix’s higher probable upside, analysts plainly believe Nutanix is more favorable than CDW.

Profitability

This table compares Nutanix and CDW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nutanix	10.03%	-38.96%	8.55%
CDW	4.70%	49.67%	8.02%

Earnings and Valuation

This table compares Nutanix and CDW”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nutanix	$2.75 billion	5.45	$188.37 million	$0.95	58.39
CDW	$22.42 billion	0.79	$1.07 billion	$8.22	16.96

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

Institutional & Insider Ownership

85.3% of Nutanix shares are held by institutional investors. Comparatively, 93.2% of CDW shares are held by institutional investors. 2.4% of Nutanix shares are held by company insiders. Comparatively, 0.8% of CDW shares are held 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.

Summary

CDW beats Nutanix on 8 of the 15 factors compared between the two stocks.

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.

About CDW

CDW Corporation provides information technology (IT) solutions in the United States, the United Kingdom, and Canada. It operates through three segments: Corporate, Small Business, and Public. The company offers discrete hardware and software products and services, as well as integrated IT solutions, including on-premise and cloud capabilities across hybrid infrastructure, digital experience, and security. It also provides hardware products comprising notebooks/mobile devices, tablets, network communications, desktop computers, collaboration, data storage and servers, and others; and software products, such as cloud solutions, software assurance, application suites, security, virtualization, operating systems, and network management. In addition, the company offers advisory and design, software development, implementation, managed, professional, configuration, partner, and telecom services, as well as warranties; delivers and manages mission critical software, systems, and network solutions; and implementation and installation, and repair services to its customers through various third-party service providers. It serves government, education, and healthcare customers; and small, medium, and large business customers. CDW Corporation was founded in 1984 and is headquartered in Vernon Hills, Illinois.