Contrasting Elastic (NYSE:ESTC) and Xunlei (NASDAQ:XNET)

Xunlei (NASDAQ:XNET) and Elastic (NYSE:ESTC) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Institutional and Insider Ownership

5.1% of Xunlei shares are held by institutional investors. Comparatively, 97.0% of Elastic shares are held by institutional investors. 21.7% of Xunlei shares are held by company insiders. Comparatively, 12.7% of Elastic shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Xunlei has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Elastic has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Profitability

This table compares Xunlei and Elastic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xunlei	-15.25%	0.62%	0.52%
Elastic	20.84%	-0.35%	-0.14%

Valuation & Earnings

This table compares Xunlei and Elastic”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xunlei	$462.41 million	0.49	$1.05 billion	($1.24)	-2.85
Elastic	$1.74 billion	5.38	$367.77 million	$3.57	24.96

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

Analyst Ratings

This is a summary of current ratings and price targets for Xunlei and Elastic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xunlei	0	1	0	0	2.00
Elastic	0	13	17	0	2.57

Elastic has a consensus price target of $98.70, suggesting a potential upside of 10.78%. Given Elastic’s stronger consensus rating and higher probable upside, analysts plainly believe Elastic is more favorable than Xunlei.

Summary

Elastic beats Xunlei on 8 of the 14 factors compared between the two stocks.

About Xunlei

Xunlei Limited is a Chinese technology company founded in 2003 and headquartered in Shenzhen. It develops internet software and services, including Xunlei, a download and content-delivery platform designed to accelerate file transfers and online access. The company also offers cloud-related services, such as cloud storage and distributed cloud computing. Through its OneThing and related offerings, Xunlei uses shared computing resources to support services including content delivery and data processing.

About Elastic

Elastic N.V. develops software for search, observability and security. Its products help organizations search and analyze data, monitor applications and infrastructure, and detect and respond to cybersecurity threats. The company’s offerings include the Elastic Stack—built around Elasticsearch and including Kibana, Logstash and Beats—as well as cloud-based services through Elastic Cloud. These tools can be used to work with data from a range of sources and support applications such as enterprise search, log analytics and security monitoring.