Analyzing GDS (NASDAQ:GDS) & Infosys (NYSE:INFY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GDS	30.70%	17.94%	6.11%
Infosys	16.21%	35.52%	20.98%

Risk & Volatility

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

Analyst Recommendations

This is a summary of current recommendations and price targets for GDS and Infosys, as provided by MarketBeat.com.

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

GDS currently has a consensus price target of $48.12, indicating a potential upside of 108.08%. Infosys has a consensus price target of $11.56, indicating a potential downside of 6.47%. Given GDS’s stronger consensus rating and higher probable upside, equities research analysts plainly believe GDS is more favorable than Infosys.

Insider and Institutional Ownership

33.7% of GDS shares are owned by institutional investors. Comparatively, 16.2% of Infosys shares are owned by institutional investors. 8.0% of GDS shares are owned by insiders. Comparatively, 22.4% of Infosys shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GDS	$1.63 billion	2.83	$132.10 million	$2.15	10.76
Infosys	$20.16 billion	2.48	$3.31 billion	$0.81	15.27

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

Summary

GDS beats Infosys on 8 of the 15 factors compared between the two stocks.

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.

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.