Reviewing Grid Dynamics (NASDAQ:GDYN) and ExlService (NASDAQ:EXLS)

Grid Dynamics (NASDAQ:GDYN) and ExlService (NASDAQ:EXLS) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk & Volatility

Grid Dynamics has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, ExlService has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Insider and Institutional Ownership

71.2% of Grid Dynamics shares are held by institutional investors. Comparatively, 92.9% of ExlService shares are held by institutional investors. 6.5% of Grid Dynamics shares are held by company insiders. Comparatively, 3.7% of ExlService shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Grid Dynamics and ExlService’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grid Dynamics	1.27%	1.20%	1.05%
ExlService	11.66%	28.50%	15.48%

Analyst Recommendations

This is a breakdown of recent recommendations for Grid Dynamics and ExlService, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grid Dynamics	2	2	4	0	2.25
ExlService	0	1	5	0	2.83

Grid Dynamics currently has a consensus price target of $9.40, suggesting a potential upside of 71.85%. ExlService has a consensus price target of $41.50, suggesting a potential upside of 59.76%. Given Grid Dynamics’ higher possible upside, equities analysts plainly believe Grid Dynamics is more favorable than ExlService.

Earnings and Valuation

This table compares Grid Dynamics and ExlService”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grid Dynamics	$411.83 million	1.11	$9.67 million	$0.05	109.40
ExlService	$2.09 billion	1.90	$251.02 million	$1.57	16.55

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

Summary

ExlService beats Grid Dynamics on 10 of the 14 factors compared between the two stocks.

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.

About ExlService

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. The company operates through Insurance, Healthcare, Analytics, and Emerging Business segments. It also provides digital operations and solutions and analytics-driven services, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. In addition, the company offers health care services related to care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement. Further, it provides financial planning and analysis, management reporting, forecasting and decision support, data management, regulatory reporting and risk, and compliance services; reservations, customer, and fulfilment services; freight billing, collections, claims management, freight audit, freight scheduling, supply chain management, and revenue assurance services; residential mortgage lending, title verification and validation, retail banking and credit cards, trust verification, commercial banking, and investment management; merchandising, pricing, and demand forecasting; and digital operations and solutions. The company offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management. ExlService Holdings, Inc. was founded in 1999 and is headquartered in New York, New York.