GDS (NASDAQ:GDS) and Wix.Com (NASDAQ:WIX) are both mid-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Analyst Ratings

This is a summary of current ratings for GDS and Wix.Com, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GDS 0 0 4 0 3.00
Wix.Com 1 5 8 0 2.50

GDS currently has a consensus price target of $56.50, suggesting a potential upside of 24.86%. Wix.Com has a consensus price target of $144.23, suggesting a potential upside of 13.51%. Given GDS’s stronger consensus rating and higher possible upside, equities research analysts plainly believe GDS is more favorable than Wix.Com.

Insider & Institutional Ownership

69.4% of GDS shares are owned by institutional investors. Comparatively, 82.8% of Wix.Com shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

GDS has a beta of 3.01, meaning that its stock price is 201% more volatile than the S&P 500. Comparatively, Wix.Com has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.

Earnings & Valuation

This table compares GDS and Wix.Com’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GDS $406.09 million 13.09 -$65.01 million ($0.51) -88.73
Wix.Com $603.70 million 10.49 -$37.12 million ($0.44) -288.77

Wix.Com has higher revenue and earnings than GDS. Wix.Com is trading at a lower price-to-earnings ratio than GDS, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GDS and Wix.Com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GDS -12.27% -6.18% -1.80%
Wix.Com -9.80% -24.02% -4.28%

Summary

GDS beats Wix.Com on 7 of the 13 factors compared between the two stocks.

GDS Company Profile

GDS Holdings Limited, together with its subsidiaries, designs, builds, and operates data centers in the People's Republic of China. The company provides colocation, managed hosting, and managed cloud services, as well as consulting services. Its data centers service customers that primarily operate in the Internet and banking industries in Shanghai and Beijing municipalities; and Jiangsu, Guangdong, Sichuan, and Hebei Provinces. The company serves cloud service providers, Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was incorporated in 2006 and is headquartered in Shanghai, the People's Republic of China.

Wix.Com Company Profile

Wix.com Ltd. develops and markets an Internet service that allows users to create Web content in Latin America, Europe, North America, Asia, and internationally. It offers Web development, design, and management solutions and apps through an online platform that enables its user base of businesses, organizations, professionals, and individuals to create a digital presence. The company's principal product is the Wix Editor, a drag-and-drop visual development and Website editing environment platform. Its applications and value-added solutions comprise Wix App Market, an online platform that offers its users a range of software apps, which could be integrated as add-ons into its users' Websites. In addition, the company provides Wix ShoutOut, which enables users to create and send customized email campaigns, such as newsletters, updates, and promotions directly from their Wix accounts. Further, it offers Wix Stores that allows its users to create, design, and manage an online store through which they may sell their products online and process payments using an integrated shopping cart app; Wix Bookings, an online appointment booking solution; Wix Hotels, a Website for hotels, B&Bs, and vacation rentals; Wix Music, an advanced music player solution; and Wix Restaurants that provides various solutions for restauranteurs, including Wix Restaurants menus, orders, and reservations. Additionally, the company provides Wix Photography, a solution for photographers looking to create their portfolio and manage their business online; Wix Video that allows its customers to showcase, promote, and sell videos on their Wix Website; and customer support and services. As of December 31, 2017, it had approximately 119.3 million registered users and 2,465,160 premium subscriptions. The company was formerly known as Wixpress Ltd. Wix.com Ltd. was founded in 2006 and is headquartered in Tel Aviv, Israel.

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