Critical Review: Nutanix (NASDAQ:NTNX) and Datasea (NASDAQ:DTSS)

Nutanix (NASDAQ:NTNX) and Datasea (NASDAQ:DTSS) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Nutanix and Datasea, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nutanix	0	9	10	1	2.60
Datasea	1	0	0	0	1.00

Nutanix currently has a consensus price target of $60.87, suggesting a potential upside of 32.32%. Given Nutanix’s stronger consensus rating and higher possible upside, research analysts clearly believe Nutanix is more favorable than Datasea.

Profitability

This table compares Nutanix and Datasea’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nutanix	9.95%	-37.41%	8.37%
Datasea	-4.80%	-88.98%	-37.33%

Risk and Volatility

Nutanix has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Datasea has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Insider and Institutional Ownership

85.3% of Nutanix shares are held by institutional investors. Comparatively, 82.1% of Datasea shares are held by institutional investors. 2.4% of Nutanix shares are held by insiders. Comparatively, 50.7% of Datasea shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Nutanix and Datasea”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nutanix	$2.69 billion	4.54	$188.37 million	$0.92	50.00
Datasea	$56.89 million	0.17	-$5.09 million	($0.32)	-2.94

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

Summary

Nutanix beats Datasea on 13 of the 15 factors compared between the two stocks.

About Nutanix

Nutanix, Inc. engages in the provision of a cloud platform leveraging web-scale engineering and consumer-grade design. It operates through the following geographic segments: United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas. The firm also provides software solutions and cloud services to customers’ enterprise infrastructure. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.

About Datasea

Datasea Inc., through its subsidiaries, provides technology and information systems in the People's Republic of China. The company provides smart city solutions and 5G messaging applications. It also offers its smart security solutions primarily to schools, tourist or scenic attractions, and public communities. In addition, the company provides intelligent acoustics products, which include ultrasonic air sterilizer, air purification and deodorization, and other products. The company was formerly known as Rose Rock, Inc. and changed its name to Datasea Inc. in October 2015. Datasea Inc. was incorporated in 2014 and is headquartered in Beijing, the People's Republic of China.