Head to Head Analysis: Infosys (NYSE:INFY) & GDS (NASDAQ:GDS)

Infosys (NYSE:INFY) and GDS (NASDAQ:GDS) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Earnings and Valuation

This table compares Infosys and GDS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infosys	$20.16 billion	2.16	$3.31 billion	$0.81	13.26
GDS	$1.63 billion	3.80	$132.10 million	$2.15	14.40

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

Profitability

This table compares Infosys and GDS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Infosys	16.38%	33.91%	20.54%
GDS	30.70%	17.94%	6.11%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Infosys and GDS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Infosys	1	10	0	0	1.91
GDS	0	2	3	1	2.83

Infosys presently has a consensus target price of $11.45, indicating a potential upside of 6.65%. GDS has a consensus target price of $48.12, indicating a potential upside of 55.37%. Given GDS’s stronger consensus rating and higher probable upside, analysts plainly believe GDS is more favorable than Infosys.

Institutional and Insider Ownership

16.2% of Infosys shares are held by institutional investors. Comparatively, 33.7% of GDS shares are held by institutional investors. 22.4% of Infosys shares are held by company insiders. Comparatively, 8.0% of GDS shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Infosys has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, GDS has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Summary

GDS beats Infosys on 9 of the 15 factors compared between the two stocks.

About Infosys

Infosys Ltd. is a digital services and consulting company, which engages in the provision of end-to-end business solutions. It operates through the following segments: Financial Services, Retail, Communication, Energy, Utilities, Resources, and Services, Manufacturing, Hi-Tech, Life Sciences, and All Other. The company was founded by Dinesh Krishnan Swamy, Senapathy Gopalakrishnan, Narayana Ramarao Nagavara Murthy, Raghavan N. S., Ashok Arora, Nandan M. Nilekani, and S. D. Shibulal on July 2, 1981 and is headquartered in Bangalore, India.

About GDS

GDS Holdings Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.