Luxoft (NYSE: LXFT) and RingCentral (NYSE:RNG) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luxoft $785.56 million 2.35 $62.63 million $1.67 32.75
RingCentral $379.72 million 10.83 -$29.30 million ($0.36) -147.64

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

Institutional & Insider Ownership

52.1% of Luxoft shares are held by institutional investors. Comparatively, 76.3% of RingCentral shares are held by institutional investors. 14.5% of RingCentral shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Luxoft 6.72% 17.81% 12.84%
RingCentral -5.80% -17.97% -9.86%

Risk and Volatility

Luxoft has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, RingCentral has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Luxoft and RingCentral, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luxoft 1 1 6 0 2.63
RingCentral 0 3 11 0 2.79

Luxoft presently has a consensus target price of $65.00, indicating a potential upside of 18.83%. RingCentral has a consensus target price of $44.62, indicating a potential downside of 16.06%. Given Luxoft’s higher probable upside, research analysts plainly believe Luxoft is more favorable than RingCentral.

Summary

Luxoft beats RingCentral on 9 of the 14 factors compared between the two stocks.

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.

RingCentral Company Profile

RingCentral, Inc. is a provider of software-as-a-service (SaaS) solutions for businesses to support modern communications. The Company’s cloud-based business communications solutions provide a single user identity across multiple locations and devices, including smartphones, tablets, personal computers (PCs) and desk phones, and allow for communication across multiple channels, including high definition (HD) voice, video, short messaging service (SMS), messaging and collaboration, conferencing, online meetings, and fax. The Company’s products include RingCentral Office, RingCentral Professional, RingCentral Fax, RingCentral Contact Center and RingCentral Glip. RingCentral Office is a multi-user, enterprise-grade communications solution. RingCentral Professional is an inbound call routing subscription with additional text and fax capabilities targeting smaller deployments, and RingCentral Fax is an Internet fax subscription that permits sending and receiving faxes over the Internet.

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