Financial Analysis: GrubHub (NYSE:GRUB) and WNS (NYSE:WNS)

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GrubHub (NYSE:GRUB) and WNS (NYSE:WNS) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Institutional and Insider Ownership

94.2% of WNS shares are held by institutional investors. 1.9% of GrubHub shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for GrubHub and WNS, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GrubHub 1 7 15 1 2.67
WNS 0 0 5 1 3.17

GrubHub presently has a consensus target price of $111.36, suggesting a potential upside of 46.80%. WNS has a consensus target price of $63.50, suggesting a potential upside of 6.05%. Given GrubHub’s higher possible upside, equities research analysts clearly believe GrubHub is more favorable than WNS.

Earnings & Valuation

This table compares GrubHub and WNS’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GrubHub $1.01 billion 6.87 $78.48 million $1.23 61.67
WNS $809.10 million 3.76 $105.43 million $2.25 26.61

WNS has lower revenue, but higher earnings than GrubHub. WNS is trading at a lower price-to-earnings ratio than GrubHub, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

GrubHub has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, WNS has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Profitability

This table compares GrubHub and WNS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GrubHub 4.97% 6.14% 4.41%
WNS 13.04% 23.64% 15.93%

About GrubHub

Grubhub Inc., together with its subsidiaries, provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company connects approximately 105,000 local restaurants with diners with diners in various cities. It offers Grubhub, Seamless, and Eat24 mobile applications and mobile Websites; and operates Websites through grubhub.com, seamless.com, eat24.com, and menupages.com. The company also provides corporate program that offers employees with various food and ordering options, including options for individual meals, group ordering, and catering, as well as proprietary tools that consolidate various food ordering into a single online account. In addition, it offers Allmenus.com and MenuPages.com, which provide an aggregated database of approximately 440,000 menus from restaurants in 50 U.S. states; Grubhub for Restaurants, a responsive Web application that can be accessed from computers and mobile devices, as well as Grubhub-provided tablets; point of sale (POS) integration, which allows restaurants to manage Grubhub orders and update their menus directly from their existing POS system; and Website and mobile application design and hosting services for restaurants, as well as technology and fulfillment services, including order transmission and customer relationship management tools. The company was formerly known as GrubHub Seamless Inc. and changed its name to Grubhub Inc. in February 2014. Grubhub Inc. was founded in 1999 and is headquartered in Chicago, Illinois.

About WNS

WNS (Holdings) Limited, a business process management company, together with its subsidiaries, provides data, voice, analytical, and business transformation services worldwide. It operates through two segments, WNS Global BPM and WNS Auto Claims BPM. The company offers industry-specific services to clients primarily in insurance; travel and leisure; diversified businesses, including manufacturing, retail, consumer packaged goods, media and entertainment, and telecommunication; utilities; consulting and professional services; healthcare; banking and financial services; and shipping and logistics industries. It also provides shared services, such as customer interaction, finance and accounting, research and analytics, technology, legal, and human resources outsourcing services. In addition, the company offers transformation services designed to help its clients to modify their business processes to enhance productivity, as well as manage changes in the business environment and leverage business knowledge to increase market competitiveness. Further, it provides claims handling and repair management services for automobile repairs through a network of third party repair centers; and a suite of accident management services, such as credit hire and credit repair. WNS (Holdings) Limited was founded in 1996 and is based in Mumbai, India.

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