Comparing PROS (NYSE:PRO) & Virtusa (NYSE:VRTU)

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for PROS and Virtusa, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PROS 0 3 8 0 2.73
Virtusa 0 0 5 0 3.00

PROS currently has a consensus target price of $71.20, indicating a potential upside of 17.76%. Virtusa has a consensus target price of $54.40, indicating a potential upside of 21.70%. Given Virtusa’s stronger consensus rating and higher probable upside, analysts plainly believe Virtusa is more favorable than PROS.

Institutional and Insider Ownership

95.7% of PROS shares are held by institutional investors. Comparatively, 86.0% of Virtusa shares are held by institutional investors. 13.7% of PROS shares are held by company insiders. Comparatively, 4.7% of Virtusa 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.

Risk and Volatility

PROS has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Virtusa has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
PROS -27.26% -41.04% -7.24%
Virtusa 2.63% 11.76% 4.01%

Valuation & Earnings

This table compares PROS and Virtusa’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PROS $197.02 million 12.91 -$64.24 million ($1.09) -55.47
Virtusa $1.25 billion 1.08 $16.15 million $1.46 30.62

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

Summary

Virtusa beats PROS on 10 of the 14 factors compared between the two stocks.

PROS Company Profile

PROS Holdings, Inc. offers artificial intelligence (AI) solutions that power commerce in the digital economy worldwide. The company's solutions enable buying experiences for business-to-business (B2B) and business-to-consumer companies. It delivers its cloud-based solutions through the Internet as a Service on a subscription basis. The company offers solutions for selling improvement, including PROS Smart CPQ that automates the quoting process by enabling sales teams, partners, and end customers on e-commerce platforms; and PROS Opportunity Detection solutions, which enhances sales productivity, accelerates quota attainment, and delivers data-driven product recommendations. It also provides PROS pricing solutions comprising PROS Control, a platform for price measurement, coordination, and strategy; and PROS Guidance, a prescriptive price guidance solution. In addition, the company provides PROS airline revenue optimization solutions consisting of PROS Airline Revenue Management, PROS Airline Real-Time Dynamic Pricing, and PROS Airline Group Sales for enterprises in the travel industry, including the airline, hotel, and cruise. Further, it offers Airline e-commerce suite of products, such as PROS Airline Shopping and PROS Airline Merchandising that provide airlines with shopping and merchandising capabilities. Additionally, the company offers professional services consisting of implementation and configuration, consulting, and training; and maintenance and support services. It sells its software solutions to customers in various industries, including automotive and industrial, B2B services, cargo, chemicals and energy, consumer goods, insurance, food and beverage, healthcare, high tech, and travel. The company markets and sells its software solutions primarily through its direct global sales force, as well as indirectly through go-to-market partners, resellers, and systems integrators. PROS Holdings, Inc. was founded in 1985 and is headquartered in Houston, Texas.

Virtusa Company Profile

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services worldwide. The company offers business and IT consulting services, including advisory/target operating model, business process re-engineering/business management, transformational solution consulting, and business/technology alignment analysis; omni-channel digital strategy, experience design accelerated solution design, and employee engagement; and application portfolio rationalization, SDLC transformation, and BA competency transformation services. It also provides application development, software product engineering, CRM and SAP implementation, content management, enterprise mobility, cloud computing, and social media solutions; systems consolidation and rationalization, technology migration and porting, and legacy application Web-enablement; data management, business intelligence, reporting and decision support, master data management, data integration, and big data analytics; and software quality assurance and managed testing services. In addition, the company offers application maintenance and support, applications enhancement, and cloud-environment management and support; managed infrastructure, and remote application monitoring and support services; and IT efficiency improvement services. Further, it offers digital engineering and operational excellence services-based, and transformational solutions. The company serves communications and technology; banking, financial services, and insurance; and media and information industries. The company has collaboration agreements with Moxtra, Inc. to develop and deploy solutions for financial services firms, as well as the Banking Industry Architecture Network; and Indiana Biosciences Research Institute. The company was formerly known as eRunway, Inc. and changed its name to Virtusa Corporation in April 2002. Virtusa Corporation was founded in 1996 and is headquartered in Southborough, Massachusetts.

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