8X8 (NYSE:EGHT) and Evertec (NYSE:EVTC) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Valuation & Earnings

This table compares 8X8 and Evertec’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
8X8 $352.59 million 5.54 -$88.74 million ($0.69) -28.25
Evertec $453.87 million 5.40 $86.27 million $1.70 20.04

Evertec has higher revenue and earnings than 8X8. 8X8 is trading at a lower price-to-earnings ratio than Evertec, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 8X8 and Evertec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
8X8 -32.60% -40.84% -18.62%
Evertec 20.62% 58.35% 13.88%

Insider and Institutional Ownership

90.2% of 8X8 shares are owned by institutional investors. Comparatively, 78.7% of Evertec shares are owned by institutional investors. 3.0% of 8X8 shares are owned by insiders. Comparatively, 0.6% of Evertec shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for 8X8 and Evertec, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
8X8 1 6 7 0 2.43
Evertec 0 0 1 0 3.00

8X8 presently has a consensus target price of $24.45, suggesting a potential upside of 25.47%. Evertec has a consensus target price of $36.00, suggesting a potential upside of 5.70%. Given 8X8’s higher probable upside, equities analysts clearly believe 8X8 is more favorable than Evertec.

Volatility & Risk

8X8 has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Evertec has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Summary

Evertec beats 8X8 on 9 of the 14 factors compared between the two stocks.

8X8 Company Profile

8×8, Inc. provides cloud-based, enterprise-class software solutions. The Company’s solutions are delivered through Software as a Service (SaaS) business model. Its segments include Americas and Europe. Its software platform brings together cloud, mobile, collaboration, video and data science technologies. Through a combination of open application program interface (API) and pre-built integrations, its solutions leverage critical customer context from internal data systems and customer relationship management (CRM) systems. Its software product, branded as 8×8 Virtual Office, delivers voice as a service across the world. 8×8 Virtual Office enables a customer to use a single business phone number to place and receive calls from any supported device. It provides software to enable a multi-channel contact center under the 8×8 Virtual Contact Center brand. Its Virtual Office Meetings software solution is a tool for teams within the enterprise to meet and collaborate on a shared project.

Evertec Company Profile

EVERTEC, Inc. engage in transaction processing business serving financial institutions, merchants, corporations, and government agencies in Latin America and the Caribbean. The company operates in four segments: Payment Services – Puerto Rico & Caribbean; Payment Services – Latin America; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. The company also offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers; and EBT services. In addition, it provides business process management solutions comprising core bank processing, network hosting and management, IT consulting services, business process outsourcing, item and cash processing, and fulfillment solutions to financial institutions, and corporate and government customers. The company manages a system of electronic payment networks that process approximately two billion transactions. It sells and distributes its services primarily through a proprietary direct sales force. The company was formerly known as Carib Latam Holdings, Inc. EVERTEC, Inc. was founded in 1988 and is based in San Juan, Puerto Rico.

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