The shares of Wipro Limited (NYSE:WIT) and LifePoint Health, Inc. (NASDAQ:LPNT) were among the active stocks of the last trading sessions. Wipro Limited (NYSE:WIT) soared to 4.12% closing at the price of $5.05 whereas the shares of LifePoint Health, Inc. (NASDAQ:LPNT) declined -0.52% with the decrease of -0.25 points closing at the price of $48.2. Wipro Limited has currently decrease -10.93% in its stock over the period of 6-months while its rival LifePoint Health, Inc. added 5.82% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money, The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Wipro Limited (NYSE:WIT) is 9.7% while the ROI of LifePoint Health, Inc. (NASDAQ:LPNT) is 1.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WIT’s EBITDA Margin is 13.05 whereas LPNT’s is 6.97.
Both the profitability ratios suggest that Wipro Limited (NYSE:WIT) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Wipro Limited (NYSE:WIT) reported $0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $0.07/share Thus lagging the analyst Estimates with a Surprise Factor of -14.3 Percent. While, LifePoint Health, Inc. (NASDAQ:LPNT) reported EPS of $1.22/share in the last quarter. The analysts projected EPS of $1.13/share depicting a Surprise of 8 Percent.
Taking a look at Earnings per Share, LifePoint Health, Inc. tends to be beating the analyst estimates more than Wipro Limited. so LPNT is more profitable than WIT.
Technical Analysis of Wipro Limited & LifePoint Health, Inc.
Moving average convergence divergence (MACD) shows that Wipro Limited (NYSE:WIT) is on a PRICE RELATIVITY trend While LifePoint Health, Inc. (NASDAQ:LPNT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Wipro Limited was in BULLISH territory and LifePoint Health, Inc. was in BEARISH territory.
WIT’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While LPNT’s candle is BEARISH with LOW.
EPS Growth Rate: WIT’s 8% versus LPNT’s 7.6%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Wipro Limited (NYSE:WIT) is predicted at 8% while LifePoint Health, Inc. (NASDAQ:LPNT) stands at 7.6%. These numbers suggest that WIT is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of WIT stands at 2.4 while LPNT is at 1.8 whereas the debt ratio of the prior is 0.29 while the debt ratio of the later is 1.32.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 4 for WIT and 2.7 for LPNT which means WIT has Sell rating whereas LPNT has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for WIT is $4.65 which is -8.6% of its current price while LPNT has price target of 52.94 which is 8.95% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
WIT currently has price to earning P/E ratio of 21.13 whereas LPNT has 151.57 while the forward P/E ratio for the prior stands at 17.29 and for the later it depicts the value of 10.77.
The price to Book P/B for WIT is 3.24, Price to Sale is at 2.24 and for LPNT these ratios stand at 0.85 and 0.31.