Critical Comparison: Jack Henry & Associates (NASDAQ:JKHY) & Grid Dynamics (NASDAQ:GDYN)

Jack Henry & Associates (NASDAQ:JKHY) and Grid Dynamics (NASDAQ:GDYN) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Earnings and Valuation

This table compares Jack Henry & Associates and Grid Dynamics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.38 billion	4.63	$455.75 million	$6.96	21.91
Grid Dynamics	$411.83 million	1.21	$9.67 million	$0.05	116.80

Jack Henry & Associates has higher revenue and earnings than Grid Dynamics. Jack Henry & Associates is trading at a lower price-to-earnings ratio than Grid Dynamics, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Jack Henry & Associates has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Jack Henry & Associates and Grid Dynamics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	4	9	1	2.79
Grid Dynamics	2	0	5	0	2.43

Jack Henry & Associates presently has a consensus target price of $198.77, indicating a potential upside of 30.32%. Grid Dynamics has a consensus target price of $10.00, indicating a potential upside of 71.23%. Given Grid Dynamics’ higher probable upside, analysts plainly believe Grid Dynamics is more favorable than Jack Henry & Associates.

Profitability

This table compares Jack Henry & Associates and Grid Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	20.59%	23.75%	16.80%
Grid Dynamics	1.27%	1.20%	1.05%

Insider & Institutional Ownership

98.8% of Jack Henry & Associates shares are held by institutional investors. Comparatively, 71.2% of Grid Dynamics shares are held by institutional investors. 0.6% of Jack Henry & Associates shares are held by insiders. Comparatively, 6.5% of Grid Dynamics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Jack Henry & Associates beats Grid Dynamics on 11 of the 15 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.