The shares of SRC Energy Inc. (NYSE:SRCI) and Cognizant Technology Solutions Corporation (NASDAQ:CTSH) were among the active stocks of the last trading sessions. SRC Energy Inc. (NYSE:SRCI) declined to -4.54% closing at the price of $8.41 whereas the shares of Cognizant Technology Solutions Corporation (NASDAQ:CTSH) declined -1.61% with the decrease of -1.15 points closing at the price of $70.29. SRC Energy Inc. has currently decrease -14.96% in its stock over the period of 6-months while its rival Cognizant Technology Solutions Corporation subtracted -13.03% 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 SRC Energy Inc. (NYSE:SRCI) is 7.9% while the ROI of Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is 16.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SRCI’s EBITDA Margin is 6.94 whereas CTSH’s is 12.53.
Both the profitability ratios suggest that Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
SRC Energy Inc. (NYSE:SRCI) reported $0.24/share EPS for the previous quarter where analysts were predicting an EPS to be $0.24/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) reported EPS of $1.19/share in the last quarter. The analysts projected EPS of $1.1/share depicting a Surprise of 8.2 Percent.
Taking a look at Earnings per Share, Cognizant Technology Solutions Corporation tends to be beating the analyst estimates more than SRC Energy Inc.. so CTSH is more profitable than SRCI.
Technical Analysis of SRC Energy Inc. & Cognizant Technology Solutions Corporation
Moving average convergence divergence (MACD) shows that SRC Energy Inc. (NYSE:SRCI) is on a PRICE RELATIVITY trend While Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the SRC Energy Inc. was in BEARISH territory and Cognizant Technology Solutions Corporation was in BEARISH territory.
SRCI’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While CTSH’s candle is BEARISH with HIGH.
EPS Growth Rate: SRCI’s 50% versus CTSH’s 13.59%
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 SRC Energy Inc. (NYSE:SRCI) is predicted at 50% while Cognizant Technology Solutions Corporation (NASDAQ:CTSH) stands at 13.59%. These numbers suggest that SRCI 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 SRCI stands at 0.7 while CTSH is at 3.3 whereas the debt ratio of the prior is 0.39 while the debt ratio of the later is 0.07.
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 2.3 for SRCI and 2.1 for CTSH which means SRCI has Hold rating whereas CTSH 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 SRCI is $14.08 which is 40.27% of its current price while CTSH has price target of 89.21 which is 21.21% 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.
SRCI currently has price to earning P/E ratio of 9.15 whereas CTSH has 20.01 while the forward P/E ratio for the prior stands at 5.68 and for the later it depicts the value of 13.85.
The price to Book P/B for SRCI is 1.42, Price to Sale is at 3.8 and for CTSH these ratios stand at 3.86 and 2.66.