Grid Dynamics (NASDAQ:GDYN) and TaskUs (NASDAQ:TASK) Critical Review

Grid Dynamics (NASDAQ:GDYN) and TaskUs (NASDAQ:TASK) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Institutional & Insider Ownership

71.2% of Grid Dynamics shares are held by institutional investors. Comparatively, 44.6% of TaskUs shares are held by institutional investors. 6.5% of Grid Dynamics shares are held by company insiders. Comparatively, 30.6% of TaskUs shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Grid Dynamics and TaskUs, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grid Dynamics	1	1	3	0	2.40
TaskUs	1	5	2	1	2.33

Grid Dynamics currently has a consensus price target of $11.33, suggesting a potential upside of 32.09%. TaskUs has a consensus price target of $17.38, suggesting a potential upside of 55.55%. Given TaskUs’ higher possible upside, analysts plainly believe TaskUs is more favorable than Grid Dynamics.

Risk and Volatility

Grid Dynamics has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, TaskUs has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500.

Valuation & Earnings

This table compares Grid Dynamics and TaskUs”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grid Dynamics	$350.57 million	2.07	$4.04 million	$0.15	57.20
TaskUs	$1.14 billion	0.88	$45.87 million	$0.89	12.55

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

Profitability

This table compares Grid Dynamics and TaskUs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grid Dynamics	3.42%	1.74%	1.52%
TaskUs	7.11%	21.27%	11.34%

Summary

TaskUs beats Grid Dynamics on 10 of the 15 factors compared between the two stocks.

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.