The shares of American Tower Corporation (REIT) (NYSE:AMT) and Ebix, Inc. (NASDAQ:EBIX) were among the active stocks of the last trading sessions. American Tower Corporation (REIT) (NYSE:AMT) soared to 0.72% closing at the price of $145.79 whereas the shares of Ebix, Inc. (NASDAQ:EBIX) declined -19.62% with the decrease of -14.18 points closing at the price of $58.1. American Tower Corporation (REIT) has currently increase 6.11% in its stock over the period of 6-months while its rival Ebix, Inc. subtracted -23.3% 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 American Tower Corporation (REIT) (NYSE:AMT) is 7.1% while the ROI of Ebix, Inc. (NASDAQ:EBIX) is 12.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMT’s EBITDA Margin is 20.91 whereas EBIX’s is 19.46.
Both the profitability ratios suggest a mixed sentiment for American Tower Corporation (REIT) (NYSE:AMT) and Ebix, Inc. (NASDAQ:EBIX).
EPS & Surprise Factor
American Tower Corporation (REIT) (NYSE:AMT) reported $0.69/share EPS for the previous quarter where analysts were predicting an EPS to be $0.81/share Thus lagging the analyst Estimates with a Surprise Factor of -14.8 Percent. While, Ebix, Inc. (NASDAQ:EBIX) reported EPS of $0.92/share in the last quarter. The analysts projected EPS of $0.89/share depicting a Surprise of 3.4 Percent.
Taking a look at Earnings per Share, Ebix, Inc. tends to be beating the analyst estimates more than American Tower Corporation (REIT). so EBIX is more profitable than AMT.
Technical Analysis of American Tower Corporation (REIT) & Ebix, Inc.
Moving average convergence divergence (MACD) shows that American Tower Corporation (REIT) (NYSE:AMT) is on a PRICE RELATIVITY trend While Ebix, Inc. (NASDAQ:EBIX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the American Tower Corporation (REIT) was in BULLISH territory and Ebix, Inc. was in BEARISH territory.
AMT’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While EBIX’s candle is BEARISH with HIGH.
EPS Growth Rate: AMT’s 8.76% versus EBIX’s 10%
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 American Tower Corporation (REIT) (NYSE:AMT) is predicted at 8.76% while Ebix, Inc. (NASDAQ:EBIX) stands at 10%. These numbers suggest that EBIX 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 AMT stands at 0.5 while EBIX is at 1.7 whereas the debt ratio of the prior is 3.8 while the debt ratio of the later is 1.22.
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 1.9 for AMT and 2.3 for EBIX which means AMT has Buy rating whereas EBIX 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 AMT is $162.32 which is 10.18% of its current price while EBIX has price target of 102.67 which is 43.41% 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.
AMT currently has price to earning P/E ratio of 58.91 whereas EBIX has 17.74 while the forward P/E ratio for the prior stands at 40.56 and for the later it depicts the value of 13.17.
The price to Book P/B for AMT is 11.6, Price to Sale is at 9.28 and for EBIX these ratios stand at 3.66 and 4.43.