The shares of DXC Technology Company (NYSE:DXC) and Wright Medical Group N.V. (NASDAQ:WMGI) were among the active stocks of the last trading sessions. DXC Technology Company (NYSE:DXC) soared to 0.08% closing at the price of $63.26 whereas the shares of Wright Medical Group N.V. (NASDAQ:WMGI) soared 7.28% with the increase of 2.02 points closing at the price of $29.75. DXC Technology Company has currently decrease -30.08% in its stock over the period of 6-months while its rival Wright Medical Group N.V. added 24.95% 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 DXC Technology Company (NYSE:DXC) is 9.8% while the ROI of Wright Medical Group N.V. (NASDAQ:WMGI) is 0.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DXC’s EBITDA Margin is 5.43 whereas WMGI’s is 40.33.
Both the profitability ratios suggest a mixed sentiment for DXC Technology Company (NYSE:DXC) and Wright Medical Group N.V. (NASDAQ:WMGI).
EPS & Surprise Factor
DXC Technology Company (NYSE:DXC) reported $2.02/share EPS for the previous quarter where analysts were predicting an EPS to be $1.94/share Thus beating the analyst Estimates with a Surprise Factor of 4.1 Percent. While, Wright Medical Group N.V. (NASDAQ:WMGI) reported EPS of $-0.09/share in the last quarter. The analysts projected EPS of $-0.15/share depicting a Surprise of 40 Percent.
Taking a look at Earnings per Share, Wright Medical Group N.V. tends to be beating the analyst estimates more than DXC Technology Company. so WMGI is more profitable than DXC.
Technical Analysis of DXC Technology Company & Wright Medical Group N.V.
Moving average convergence divergence (MACD) shows that DXC Technology Company (NYSE:DXC) is on a PRICE RELATIVITY trend While Wright Medical Group N.V. (NASDAQ:WMGI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the DXC Technology Company was in BEARISH territory and Wright Medical Group N.V. was in BULLISH territory.
DXC’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While WMGI’s candle is BULLISH with HIGH.
EPS Growth Rate: DXC’s 6.5% versus WMGI’s 21.6%
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 DXC Technology Company (NYSE:DXC) is predicted at 6.5% while Wright Medical Group N.V. (NASDAQ:WMGI) stands at 21.6%. These numbers suggest that WMGI 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 DXC stands at 0.9 while WMGI is at 2.1 whereas the debt ratio of the prior is 0.61 while the debt ratio of the later is 1.94.
The values of the both ratios suggest that WMGI is more suitable investment when the liquidity and risk is the main concern.
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 2.2 for DXC and 1.5 for WMGI which means DXC has Hold rating whereas WMGI 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 DXC is $102.44 which is 38.25% of its current price while WMGI has price target of 32.43 which is 8.26% 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.
DXC currently has price to earning P/E ratio of 9.97 whereas WMGI has 0 while the forward P/E ratio for the prior stands at 6.96 and for the later it depicts the value of 130.48.
The price to Book P/B for DXC is 1.57, Price to Sale is at 0.75 and for WMGI these ratios stand at 5.55 and 4.69.