Comparing Zscaler (ZS) & Virtusa (VRTU)

Zscaler (NASDAQ: ZS) and Virtusa (NASDAQ:VRTU) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

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86.7% of Virtusa shares are owned by institutional investors. 6.0% of Virtusa shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Zscaler and Virtusa’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zscaler N/A N/A N/A N/A N/A
Virtusa $858.73 million 1.61 $11.85 million $0.67 70.10

Virtusa has higher revenue and earnings than Zscaler.

Analyst Ratings

This is a summary of current recommendations and price targets for Zscaler and Virtusa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zscaler 0 6 3 1 2.50
Virtusa 0 1 5 1 3.00

Zscaler currently has a consensus target price of $30.60, suggesting a potential upside of 11.35%. Virtusa has a consensus target price of $58.71, suggesting a potential upside of 25.00%. Given Virtusa’s stronger consensus rating and higher possible upside, analysts clearly believe Virtusa is more favorable than Zscaler.

Profitability

This table compares Zscaler and Virtusa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zscaler N/A N/A N/A
Virtusa 0.92% 4.93% 3.00%

Summary

Virtusa beats Zscaler on 9 of the 9 factors compared between the two stocks.

Virtusa Company Profile

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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