Analyzing Qihoo 360 Technology (QIHU) & Virtusa (VRTU)

Qihoo 360 Technology (NYSE: QIHU) and Virtusa (NASDAQ:VRTU) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Risk & Volatility

Qihoo 360 Technology has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Virtusa has a beta of 1.71, meaning that its stock price is 71% more volatile than the S&P 500.

Earnings and Valuation

This table compares Qihoo 360 Technology and Virtusa’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Qihoo 360 Technology N/A N/A N/A $2.14 35.94
Virtusa $858.73 million 1.55 $11.85 million $0.71 64.04

Virtusa has higher revenue and earnings than Qihoo 360 Technology. Qihoo 360 Technology is trading at a lower price-to-earnings ratio than Virtusa, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Qihoo 360 Technology and Virtusa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qihoo 360 Technology 17.95% 30.01% 9.81%
Virtusa 2.54% 4.86% 3.01%

Analyst Ratings

This is a breakdown of recent recommendations for Qihoo 360 Technology and Virtusa, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qihoo 360 Technology 0 0 0 0 N/A
Virtusa 0 0 7 0 3.00

Virtusa has a consensus target price of $48.86, suggesting a potential upside of 7.45%. Given Virtusa’s higher possible upside, analysts plainly believe Virtusa is more favorable than Qihoo 360 Technology.

Insider and Institutional Ownership

88.0% of Virtusa shares are held by institutional investors. 6.0% of Virtusa shares are held 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.

Summary

Virtusa beats Qihoo 360 Technology on 7 of the 11 factors compared between the two stocks.

About Qihoo 360 Technology

Qihoo 360 Technology Co. Ltd. is a China-based company principally engaged in the operations of Internet services. The Company’s segments include Internet services, smart hardware and IOT devices. The Company’s Internet and mobile security products include 360 Safe Guard, 360 Anti-virus and 360 Mobile Safe. The Company is also involved in the development of various platform products to meet a range of security-related needs of Internet users and create access points to the Internet, which include 360 browsers; 360 Personal Start-up Page and its subpages; 360 Search, and 360 Mobile Assistant. The Company also provides online advertising service solutions, such as sponsored links (advertising links), on its platform products, such as 360 Personal Start-up Page, 360 Search and 360 Mobile Assistant; Internet value-added services; Internet of things (IOT) devices, and other services. It also serves as an agent for providing online distribution services and payment collections services.

About Virtusa

Virtusa Corporation (Virtusa) is an information technology services company. The Company’s services include information technology (IT) and business consulting, digital enablement services, user experience (UX) design, development of IT applications, maintenance and support services, systems integration, infrastructure and managed services. Its services enable its clients to accelerate business outcomes by consolidating, rationalizing and modernizing the clients’ core customer-facing processes into one or more core systems. It delivers solutions through a global delivery model, applying advanced methods, such as Agile, a technique designed to accelerate application development. The Company uses its consulting methodology, Accelerated Solution Design (ASD). It supports the Chief Information Officers (CIOs) of its client organizations in solving their critical issues, including managing total cost of ownership, accelerating time-to-market and increasing productivity.

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