Financial Analysis: Nutanix (NASDAQ:NTNX) versus CoStar Group (NASDAQ:CSGP)

CoStar Group (NASDAQ:CSGP) and Nutanix (NASDAQ:NTNX) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Valuation and Earnings

This table compares CoStar Group and Nutanix”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoStar Group	$3.06 billion	9.33	$138.70 million	$0.05	1,345.00
Nutanix	$2.54 billion	6.10	$188.37 million	$0.64	90.03

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

Profitability

This table compares CoStar Group and Nutanix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CoStar Group	0.66%	2.45%	1.99%
Nutanix	7.42%	-28.01%	7.03%

Analyst Ratings

This is a breakdown of current recommendations and price targets for CoStar Group and Nutanix, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoStar Group	2	5	12	1	2.60
Nutanix	0	4	14	1	2.84

CoStar Group presently has a consensus target price of $93.38, suggesting a potential upside of 38.86%. Nutanix has a consensus target price of $86.80, suggesting a potential upside of 50.64%. Given Nutanix’s stronger consensus rating and higher possible upside, analysts plainly believe Nutanix is more favorable than CoStar Group.

Risk & Volatility

CoStar Group has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Nutanix has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Institutional & Insider Ownership

96.6% of CoStar Group shares are held by institutional investors. Comparatively, 85.3% of Nutanix shares are held by institutional investors. 1.1% of CoStar Group shares are held by insiders. Comparatively, 2.4% of Nutanix shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Nutanix beats CoStar Group on 8 of the 14 factors compared between the two stocks.

About CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.

About Nutanix

Nutanix, Inc. engages in the provision of a cloud platform leveraging web-scale engineering and consumer-grade design. It operates through the following geographic segments: United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas. The firm also provides software solutions and cloud services to customers’ enterprise infrastructure. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.