Syntel (SYNT) & PFSweb (PFSW) Head to Head Contrast

Syntel (NASDAQ: SYNT) and PFSweb (NASDAQ:PFSW) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Institutional & Insider Ownership

34.8% of Syntel shares are held by institutional investors. Comparatively, 58.0% of PFSweb shares are held by institutional investors. 61.1% of Syntel shares are held by insiders. Comparatively, 5.2% of PFSweb shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Syntel and PFSweb, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Syntel 0 5 3 0 2.38
PFSweb 0 0 4 0 3.00

Syntel currently has a consensus price target of $22.00, indicating a potential downside of 6.62%. PFSweb has a consensus price target of $11.63, indicating a potential upside of 40.91%. Given PFSweb’s stronger consensus rating and higher possible upside, analysts plainly believe PFSweb is more favorable than Syntel.

Profitability

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

Net Margins Return on Equity Return on Assets
Syntel 18.64% -137.94% 36.93%
PFSweb -3.55% -1.71% -0.35%

Valuation and Earnings

This table compares Syntel and PFSweb’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Syntel $966.55 million 2.02 -$57.38 million $2.05 11.49
PFSweb $334.64 million 0.47 -$7.53 million ($0.65) -12.69

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

Risk & Volatility

Syntel has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, PFSweb has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Summary

Syntel beats PFSweb on 7 of the 13 factors compared between the two stocks.

Syntel Company Profile

Syntel, Inc. (Syntel) is a global provider of digital transformation, information technology (IT) and knowledge process outsourcing (KPO) services. The Company operates through five segments: Banking and Financial Services, Healthcare and Life Sciences, Insurance, Manufacturing, and Retail, Logistics and Telecom. Syntel provides a range of services to its customers through its IT services, including Managed Services, Digital One and through its KPO services. Through its Managed Services offering, the Company provides software applications development, maintenance, testing, IT infrastructure, cloud and migration services. Through its SyntBots platform, the Company delivers internally developed automation capabilities that improve the productivity and quality of its Managed Services offerings. The Company’s Digital One service line centralizes the delivery of digital architecture, Web and mobile applications, user experience, Big Data, analytics, social and Internet of Things services.

PFSweb Company Profile

PFSWEB, Inc. is a global provider of omni-channel commerce solutions, including a range of technology, infrastructure and professional services. The Company’s service offerings include Website design, creation and integration, digital agency and marketing, e-commerce technologies, order management, customer care, logistics and fulfillment, financial management and professional consulting. It operates through two segments: PFSweb, and Business and Retail Connect. PFSweb is a global provider of various infrastructure, technology and digital agency solutions and operates as a service fee business. In the Business and Retail Connect segment, subsidiaries of the Company purchase inventory from clients and resell the inventory to client customers. Its solutions support direct-to-consumer (DTC), business-to-business (B2B) and retail sales channels. It markets its solutions as PFSweb’s End2End eCommerce solution.

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