Comparing SolarWinds (SWI) and Luxoft (LXFT)

SolarWinds (NYSE: SWI) and Luxoft (NYSE:LXFT) are both technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
SolarWinds 20.52% 19.24% 12.70%
Luxoft 6.72% 17.81% 12.84%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for SolarWinds and Luxoft, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarWinds 0 0 0 0 N/A
Luxoft 1 3 3 0 2.29

Luxoft has a consensus price target of $60.40, suggesting a potential upside of 18.08%. Given Luxoft’s higher probable upside, analysts clearly believe Luxoft is more favorable than SolarWinds.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SolarWinds N/A N/A N/A $1.18 50.83
Luxoft $785.56 million 2.19 $62.63 million $1.67 30.63

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

Risk & Volatility

SolarWinds has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Luxoft has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Institutional and Insider Ownership

52.6% of Luxoft shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Luxoft beats SolarWinds on 7 of the 9 factors compared between the two stocks.

SolarWinds Company Profile

SolarWinds, Inc. (SolarWinds) is a holding company. The Company designs, develops, markets, sells and supports enterprise-class information technology (IT), infrastructure management software to IT and DevOps professionals in organizations of all sizes. Its products categories include network management, which is used to monitor and manage the performance of network infrastructure; systems management, which is used to monitor and manage the performance of applications, physical and virtual servers, storage and databases; MSP, which is used by managed service providers to monitor and manage the IT infrastructure of their end clients, SMBs, and cloud, its cloud-based products, which are used to monitor and manage applications and application infrastructure. Its customers include small- and mid-size businesses, enterprises, MSPs, and local, state and federal Government entities.

Luxoft Company Profile

Luxoft Holding, Inc., is a provider of software development services and information technology (IT) solutions to a global client base consisting primarily of large multinational corporations. The Company’s software development services consist of custom software development and support, product engineering and testing, and technology consulting. The Company’s solutions are based on its proprietary products and platforms that directly impact its clients’ business outcomes and efficiently deliver continuous innovation. The Company develops its solutions and delivers its services from 34 cities with delivery centers worldwide. Its products and platforms include Horizon, SuperCloud, Twister, iStockTrack, TEORA, Populus, AllView, CVNAR and Retail Engagement Suite (RES) in Internet of Things (IoT) space.

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