Contrasting Grid Dynamics (NASDAQ:GDYN) and Twilio (NYSE:TWLO)

Twilio (NYSE:TWLO) and Grid Dynamics (NASDAQ:GDYN) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Twilio and Grid Dynamics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Twilio	1	1	22	3	3.00
Grid Dynamics	2	1	4	1	2.50

Twilio presently has a consensus price target of $249.68, indicating a potential upside of 14.50%. Grid Dynamics has a consensus price target of $9.40, indicating a potential upside of 18.09%. Given Grid Dynamics’ higher possible upside, analysts plainly believe Grid Dynamics is more favorable than Twilio.

Volatility & Risk

Twilio has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Grid Dynamics has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares Twilio and Grid Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Twilio	20.61%	5.09%	4.15%
Grid Dynamics	0.68%	1.90%	1.66%

Earnings & Valuation

This table compares Twilio and Grid Dynamics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Twilio	$5.57 billion	6.01	$33.83 million	$7.18	30.37
Grid Dynamics	$422.58 million	1.53	$9.67 million	$0.02	398.00

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

Insider & Institutional Ownership

84.3% of Twilio shares are held by institutional investors. Comparatively, 71.2% of Grid Dynamics shares are held by institutional investors. 0.2% of Twilio shares are held by company insiders. Comparatively, 6.5% of Grid Dynamics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Twilio beats Grid Dynamics on 12 of the 15 factors compared between the two stocks.

About Twilio

Twilio Inc., together with its subsidiaries, provides customer engagement platform solutions in the United States and internationally. It operates through two segments, Twilio Communications and Twilio Segment. The company provides various application programming interfaces and software solutions for communications between customers and end users, including messaging, voice, email, flex, marketing campaigns, and user identity and authentication. It also offers software products to build direct, personalized relationships with their end users, such as segment, a platform that provides tools for first-party data by unifying real-time information collected; and engage, an automation platform for the delivery of omnichannel campaigns. Twilio Inc. was incorporated in 2008 and is headquartered in San Francisco, California.

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.