Financial Analysis: NICE (NASDAQ:NICE) and Grid Dynamics (NASDAQ:GDYN)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NICE	16.11%	15.31%	10.40%
Grid Dynamics	0.74%	0.15%	0.13%

Institutional & Insider Ownership

63.3% of NICE shares are held by institutional investors. Comparatively, 71.2% of Grid Dynamics shares are held by institutional investors. 0.0% of NICE shares are held by insiders. Comparatively, 7.2% of Grid Dynamics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

NICE has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for NICE and Grid Dynamics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NICE	0	3	12	0	2.80
Grid Dynamics	0	0	5	1	3.17

NICE currently has a consensus price target of $259.50, suggesting a potential upside of 47.93%. Grid Dynamics has a consensus price target of $18.33, suggesting a potential downside of 10.70%. Given NICE’s higher probable upside, equities research analysts clearly believe NICE is more favorable than Grid Dynamics.

Valuation and Earnings

This table compares NICE and Grid Dynamics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NICE	$2.64 billion	4.18	$338.30 million	$6.46	27.15
Grid Dynamics	$328.36 million	5.16	-$1.76 million	$0.03	684.33

NICE has higher revenue and earnings than Grid Dynamics. NICE 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

NICE beats Grid Dynamics on 8 of the 15 factors compared between the two stocks.

About NICE

NICE Ltd., together with its subsidiaries, provides cloud platforms for AI-driven digital business solutions worldwide. It offers CXone, a cloud native open platform; Enlighten, an AI engine for the customer engagement market; and smart self service enable organizations to address consumers' needs; and journey orchestration solutions that empower organizations to connect and route customers to deal with the customer's request, and connects them using real time AI-based routing. The company provides smart self service solutions that empower organizations to build intelligent automated conversations based on data; and prepared agent solutions and tools enable contact center agents to guide and alert them in real time; provides solutions that help organizations to record structured and unstructured customer interaction and transaction data; and NICE Evidencentral, an digital evidence management platform for public safety emergency communications, law enforcement, and criminal justice helps agencies. In addition, it offers X-Sight, is an open and flexible AI-cloud platform for financial crime and compliance; Xceed, a cloud platform for comprehensive AML and fraud prevention for small and mid-sized organizations; data intelligence solutions that enable organizations to turn raw data into comprehensive actionable intelligence to prevent and detect financial crimes; AI and analytics technologies to detect and prevent financial crimes in real-time; money laundering and fraud prevention solutions that help organizations adhere to capital markets compliance and anti-money laundering compliance regulations; intelligent investigations solutions; and self-service solutions that provide organizations with customization and self-development capabilities. The company was formerly known as NICE-Systems Ltd. and changed its name to NICE Ltd. in June 2016. NICE Ltd. was founded in 1986 and is headquartered in Ra'anana, Israel.

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.