EPAM Systems (NYSE:EPAM) vs. Zscaler (ZS) Financial Review

EPAM Systems (NYSE: EPAM) and Zscaler (NASDAQ:ZS) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

90.7% of EPAM Systems shares are held by institutional investors. Comparatively, 18.1% of Zscaler shares are held by institutional investors. 5.3% of EPAM Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for EPAM Systems and Zscaler, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EPAM Systems 0 2 13 0 2.87
Zscaler 0 7 3 1 2.45

EPAM Systems currently has a consensus price target of $124.80, suggesting a potential downside of 0.55%. Zscaler has a consensus price target of $33.55, suggesting a potential downside of 14.84%. Given EPAM Systems’ stronger consensus rating and higher probable upside, equities research analysts clearly believe EPAM Systems is more favorable than Zscaler.

Profitability

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

Net Margins Return on Equity Return on Assets
EPAM Systems 7.33% 17.45% 14.17%
Zscaler N/A N/A N/A

Earnings & Valuation

This table compares EPAM Systems and Zscaler’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EPAM Systems $1.45 billion 4.62 $72.76 million $2.85 44.03
Zscaler N/A N/A N/A N/A N/A

EPAM Systems has higher revenue and earnings than Zscaler.

Summary

EPAM Systems beats Zscaler on 9 of the 10 factors compared between the two stocks.

About EPAM Systems

EPAM Systems, Inc. provides software product development and digital platform engineering services primarily in North America, Europe, Asia, and Australia. It offers software product development services, including product research, customer experience design, prototyping, program management, component design and integration, lifecycle software testing, product deployment, end-user customization, performance tuning, product support and maintenance, managed services, and porting and cross-platform migration. The company provides custom application development services, such as business and technical requirement analysis, user experience design, solution architecture creation and validation, development, component design and integration, quality assurance and testing, deployment, performance tuning, support and maintenance, legacy applications re-engineering/refactoring, porting and cross-platform migration, and documentation. It also offers application testing services, including software application testing, testing for enterprise IT, and consulting services; application maintenance and support services, such as incident management, fault investigation diagnosis, work-around provision, application bug fixes, release management, enhancements, and third-party maintenance; and infrastructure management services comprising application, database, network, server, storage, and systems operations management, as well as incident notification and resolutions. In addition, it provides enterprise information management services. It serves customers in financial service, travel and consumer, software, hi-tech, media and entertainment, and life sciences and healthcare industries. The company was founded in 1993 and is headquartered in Newtown, Pennsylvania.

About Zscaler

Zscaler, Inc. operates as a cloud security company worldwide. The company develops a software-as-a-service based security platform that secures access for users and devices to applications and services. It serves airline and transportation, conglomerate, consumer good and retail, financial service, healthcare, manufacturing, media and communication, public sector and education, technology, and telecommunications service industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.

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