iSoftStone (ISS) & Virtusa (VRTU) Head-To-Head Survey

iSoftStone (NYSE: ISS) and Virtusa (NASDAQ:VRTU) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for iSoftStone and Virtusa, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
iSoftStone 0 0 0 0 N/A
Virtusa 0 0 7 0 3.00

Virtusa has a consensus target price of $48.86, indicating a potential upside of 12.06%.

Earnings & Valuation

This table compares iSoftStone and Virtusa’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
iSoftStone N/A N/A N/A ($0.06) N/A
Virtusa $858.73 million 1.49 $11.85 million $0.71 61.41

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

Profitability

This table compares iSoftStone and Virtusa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
iSoftStone N/A N/A N/A
Virtusa 2.54% 4.86% 3.01%

Insider and Institutional Ownership

87.5% of Virtusa shares are held by institutional investors. 6.0% of Virtusa shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Virtusa beats iSoftStone on 8 of the 8 factors compared between the two stocks.

About iSoftStone

iSoftStone Holdings Limited (iSoftStone Holdings), is an information technology (IT) services provider. The Company’s integrated suite of IT services and solutions, including Consulting & Solutions, IT Services and Business Process Outsourcing (BPO), supports large corporations in China, North America, Europe and Japan. In Consulting and Solutions engagements, its consultants work closely with clients to identify their business needs and formulate solutions by leveraging multiple components of its IT Services and BPO offerings. The Company’s IT Services offerings help clients maintain their legacy IT systems and develop and implement new applications. In BPO, it takes ownership of managing clients’ non-core business processes, which typically are time and resource intensive. In August 2014, Isoftstone Holdings Ltd completed its merger with New iSoftStone Acquisition Limited, wholly-owned subsidiary of New iSoftStone Holdings Limited.

About Virtusa

Virtusa Corporation (Virtusa) is an information technology services company. The Company’s services include information technology (IT) and business consulting, digital enablement services, user experience (UX) design, development of IT applications, maintenance and support services, systems integration, infrastructure and managed services. Its services enable its clients to accelerate business outcomes by consolidating, rationalizing and modernizing the clients’ core customer-facing processes into one or more core systems. It delivers solutions through a global delivery model, applying advanced methods, such as Agile, a technique designed to accelerate application development. The Company uses its consulting methodology, Accelerated Solution Design (ASD). It supports the Chief Information Officers (CIOs) of its client organizations in solving their critical issues, including managing total cost of ownership, accelerating time-to-market and increasing productivity.

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