NetScout Systems (NASDAQ: NTCT) and Syntel (NASDAQ:SYNT) are both mid-cap technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.
Institutional and Insider Ownership
40.4% of Syntel shares are held by institutional investors. 3.5% of NetScout Systems shares are held by company insiders. Comparatively, 61.1% of Syntel shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for NetScout Systems and Syntel, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
NetScout Systems currently has a consensus target price of $27.80, indicating a potential upside of 0.91%. Syntel has a consensus target price of $22.43, indicating a potential downside of 18.17%. Given NetScout Systems’ stronger consensus rating and higher probable upside, analysts clearly believe NetScout Systems is more favorable than Syntel.
This table compares NetScout Systems and Syntel’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares NetScout Systems and Syntel’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|NetScout Systems||$1.16 billion||2.07||$33.29 million||$0.05||551.00|
|Syntel||$923.83 million||2.46||$166.26 million||$1.99||13.77|
Syntel has lower revenue, but higher earnings than NetScout Systems. Syntel is trading at a lower price-to-earnings ratio than NetScout Systems, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
NetScout Systems has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, Syntel has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.
About NetScout Systems
NetScout Systems, Inc. (NetScout) provides operational intelligence and performance analytics for service assurance and cyber security solutions. The Company’s solutions are used in various service provider, enterprise and government networks. Its nGenius and Infinistream technologies, along with certain product lines from the acquired businesses, enable information technology (IT) organizations to manage service delivery quality, and identify and address business service performance issues and security threats. The Company’s manufacturing operations consist of final product assembly, configuration and testing. The Company’s nGeniusONE Service Assurance Solution is used to support NetScout’s enterprise, service provider and government customers. The Company’s Intelligent Data Sources, marketed under the Infinistream brand, provide collection and analysis of high-volume packet-flow data from across the network that is displayed through the nGeniusONE Service Assurance Solution.
Syntel, Inc. (Syntel) is a global provider of digital transformation, information technology (IT) and knowledge process outsourcing (KPO) services. The Company operates through five segments: Banking and Financial Services, Healthcare and Life Sciences, Insurance, Manufacturing, and Retail, Logistics and Telecom. Syntel provides a range of services to its customers through its IT services, including Managed Services, Digital One and through its KPO services. Through its Managed Services offering, the Company provides software applications development, maintenance, testing, IT infrastructure, cloud and migration services. Through its SyntBots platform, the Company delivers internally developed automation capabilities that improve the productivity and quality of its Managed Services offerings. The Company’s Digital One service line centralizes the delivery of digital architecture, Web and mobile applications, user experience, Big Data, analytics, social and Internet of Things services.
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