The shares of Momo Inc. (NASDAQ:MOMO) and Nutanix, Inc. (NASDAQ:NTNX) were among the active stocks of the last trading sessions. Momo Inc. (NASDAQ:MOMO) soared to 1.28% closing at the price of $35.51 whereas the shares of Nutanix, Inc. (NASDAQ:NTNX) declined -0.87% with the decrease of -0.34 points closing at the price of $38.59. Momo Inc. has currently increase 2.42% in its stock over the period of 6-months while its rival Nutanix, Inc. subtracted -28.24% 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 Momo Inc. (NASDAQ:MOMO) is 28.1% while the ROI of Nutanix, Inc. (NASDAQ:NTNX) is -25.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MOMO’s EBITDA Margin is 14.57 whereas NTNX’s is -28.91.
Both the profitability ratios suggest that Momo Inc. (NASDAQ:MOMO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Momo Inc. (NASDAQ:MOMO) reported $0.66/share EPS for the previous quarter where analysts were predicting an EPS to be $0.61/share Thus beating the analyst Estimates with a Surprise Factor of 8.2 Percent. While, Nutanix, Inc. (NASDAQ:NTNX) reported EPS of $-0.11/share in the last quarter. The analysts projected EPS of $-0.21/share depicting a Surprise of 47.6 Percent.
Taking a look at Earnings per Share, Nutanix, Inc. tends to be beating the analyst estimates more than Momo Inc.. so NTNX is more profitable than MOMO.
Technical Analysis of Momo Inc. & Nutanix, Inc.
Moving average convergence divergence (MACD) shows that Momo Inc. (NASDAQ:MOMO) is on a PRICE RELATIVITY trend While Nutanix, Inc. (NASDAQ:NTNX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Momo Inc. was in BEARISH territory and Nutanix, Inc. was in BEARISH territory.
MOMO’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While NTNX’s candle is BULLISH with HIGH.
EPS Growth Rate: MOMO’s 27.97% versus NTNX’s 0%
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 Momo Inc. (NASDAQ:MOMO) is predicted at 27.97% while Nutanix, Inc. (NASDAQ:NTNX) stands at 0%. These numbers suggest that MOMO 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 MOMO stands at 3.5 while NTNX is at 2.8 whereas the debt ratio of the prior is 0.21 while the debt ratio of the later is 1.31.
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 1.7 for MOMO and 1.9 for NTNX which means MOMO has Buy rating whereas NTNX has Buy 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 MOMO is $56.44 which is 37.08% of its current price while NTNX has price target of 61.63 which is 37.38% 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.
MOMO currently has price to earning P/E ratio of 17.49 whereas NTNX has 0 while the forward P/E ratio for the prior stands at 10.91 and for the later it depicts the value of 0.
The price to Book P/B for MOMO is 5.09, Price to Sale is at 4.27 and for NTNX these ratios stand at 20.2 and 5.74.