Critical Comparison: Inovalon (INOV) & DXC Technology (DXC)

Inovalon (NASDAQ:INOV) and DXC Technology (NYSE:DXC) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Earnings and Valuation

This table compares Inovalon and DXC Technology’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inovalon $449.36 million 3.40 $34.81 million $0.23 43.48
DXC Technology $24.56 billion 1.01 $1.75 billion $7.94 11.13

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Inovalon and DXC Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inovalon 1 1 0 0 1.50
DXC Technology 0 5 10 1 2.75

Inovalon currently has a consensus price target of $12.00, suggesting a potential upside of 20.00%. DXC Technology has a consensus price target of $103.47, suggesting a potential upside of 17.03%. Given Inovalon’s higher probable upside, analysts plainly believe Inovalon is more favorable than DXC Technology.

Profitability

This table compares Inovalon and DXC Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inovalon -0.40% 3.69% 1.98%
DXC Technology 7.74% 18.67% 7.39%

Institutional and Insider Ownership

34.0% of Inovalon shares are owned by institutional investors. Comparatively, 85.2% of DXC Technology shares are owned by institutional investors. 50.9% of Inovalon shares are owned by insiders. Comparatively, 0.7% of DXC Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Inovalon has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, DXC Technology has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Dividends

DXC Technology pays an annual dividend of $0.76 per share and has a dividend yield of 0.9%. Inovalon does not pay a dividend. DXC Technology pays out 9.6% of its earnings in the form of a dividend.

Summary

DXC Technology beats Inovalon on 11 of the 17 factors compared between the two stocks.

About Inovalon

Inovalon Holdings, Inc., a technology company, provides cloud-based platforms empowering a data-driven transformation from volume-based to value-based models in the healthcare industry. The company's platform enables the assessment and enhancement of clinical and quality outcomes and financial performance. It serves health plans and provider organizations, as well as pharmaceutical, medical device, and diagnostics companies. The company provides technology that supports approximately 500 healthcare organizations. Its platforms are informed by data pertaining to approximately 932,000 physicians; 455,000 clinical facilities; and approximately 240 million individuals and 37 billion medical events. Inovalon Holdings, Inc. was founded in 1998 and is headquartered in Bowie, Maryland.

About DXC Technology

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia. It operates through three segments: Global Business Services (GBS), Global Infrastructure Services (GIS), and United States Public Sector (USPS). The GBS segment offers technology solutions comprising enterprise, cloud application, and consulting services; application services; analytics services; business process services; and industry software and solutions. The GIS segment offers cloud and platform services; workplace, mobility, and Internet of Things services; and security solutions. The USPS segment delivers IT services and business solutions to all levels of government in the United States. This segment offers cloud, platform, and IT outsourcing services; enterprise and cloud application services; enterprise security solutions; mobile enterprise, virtual desktop and application, and workplace device services; and analytics services, such as analytics platforms, information governance, artificial intelligence, and advisory services. The company was formerly known as Computer Sciences Corporation and changed its name to DXC Technology Company in April 2017 as a result of its merger with the Enterprise Services business of Hewlett Packard Enterprise Company. DXC Technology Company was founded in 1959 and is headquartered in Tysons, Virginia.

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