Financial Comparison: GDS (NASDAQ:GDS) vs. Infosys (NYSE:INFY)

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

Volatility & Risk

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Infosys	16.38%	33.91%	20.54%
GDS	30.70%	17.94%	6.11%

Insider & Institutional Ownership

16.2% of Infosys shares are held by institutional investors. Comparatively, 33.7% of GDS shares are held by institutional investors. 22.4% of Infosys shares are held by company insiders. Comparatively, 8.0% of GDS shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infosys	$20.16 billion	2.46	$3.31 billion	$0.81	15.10
GDS	$1.63 billion	2.83	$132.10 million	$2.15	10.73

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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Infosys and GDS, as reported by MarketBeat.com.

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

Infosys currently has a consensus target price of $11.45, suggesting a potential downside of 6.39%. GDS has a consensus target price of $48.12, suggesting a potential upside of 108.48%. Given GDS’s stronger consensus rating and higher probable upside, analysts plainly believe GDS is more favorable than Infosys.

Summary

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

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.

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.