Analyzing Virtusa (VRTU) & Zscaler (ZS)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Virtusa 0.92% 4.93% 3.00%
Zscaler N/A N/A N/A

Analyst Ratings

This is a breakdown of recent ratings and target prices for Virtusa and Zscaler, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtusa 0 1 5 1 3.00
Zscaler 0 6 3 1 2.50

Virtusa currently has a consensus price target of $58.71, suggesting a potential upside of 21.49%. Zscaler has a consensus price target of $30.60, suggesting a potential upside of 8.90%. Given Virtusa’s stronger consensus rating and higher probable upside, analysts clearly believe Virtusa is more favorable than Zscaler.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtusa $858.73 million 1.66 $11.85 million $0.67 72.13
Zscaler N/A N/A N/A N/A N/A

Virtusa has higher revenue and earnings than Zscaler.

Insider & Institutional Ownership

86.7% of Virtusa shares are owned by institutional investors. 6.0% of Virtusa shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Virtusa beats Zscaler on 9 of the 9 factors compared between the two stocks.

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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