Critical Comparison: EVERTEC (NYSE:EVTC) & Applied Digital (NASDAQ:APLD)

EVERTEC (NYSE:EVTC) and Applied Digital (NASDAQ:APLD) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Volatility and Risk

EVERTEC has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Applied Digital has a beta of 4.78, meaning that its share price is 378% more volatile than the S&P 500.

Profitability

This table compares EVERTEC and Applied Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EVERTEC	10.20%	33.01%	8.85%
Applied Digital	-74.95%	-88.87%	-20.16%

Analyst Ratings

This is a summary of current ratings for EVERTEC and Applied Digital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EVERTEC	1	1	2	0	2.25
Applied Digital	0	0	7	0	3.00

EVERTEC currently has a consensus price target of $35.00, indicating a potential upside of 4.10%. Applied Digital has a consensus price target of $11.14, indicating a potential upside of 28.08%. Given Applied Digital’s stronger consensus rating and higher possible upside, analysts plainly believe Applied Digital is more favorable than EVERTEC.

Valuation & Earnings

This table compares EVERTEC and Applied Digital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EVERTEC	$694.71 million	3.08	$79.72 million	$1.28	26.27
Applied Digital	$189.96 million	9.68	-$149.27 million	($1.17)	-7.44

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

Institutional & Insider Ownership

96.8% of EVERTEC shares are owned by institutional investors. Comparatively, 65.7% of Applied Digital shares are owned by institutional investors. 0.8% of EVERTEC shares are owned by company insiders. Comparatively, 11.8% of Applied Digital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

EVERTEC beats Applied Digital on 8 of the 14 factors compared between the two stocks.

About EVERTEC

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.