Critical Analysis: Applied Digital (NASDAQ:APLD) & EVERTEC (NYSE:EVTC)

Applied Digital (NASDAQ:APLD) and EVERTEC (NYSE:EVTC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Applied Digital and EVERTEC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Digital	0	0	7	0	3.00
EVERTEC	1	1	2	0	2.25

Applied Digital presently has a consensus price target of $11.14, suggesting a potential upside of 18.29%. EVERTEC has a consensus price target of $35.00, suggesting a potential upside of 2.79%. Given Applied Digital’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Applied Digital is more favorable than EVERTEC.

Volatility and Risk

Applied Digital has a beta of 4.78, suggesting that its share price is 378% more volatile than the S&P 500. Comparatively, EVERTEC has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Earnings & Valuation

This table compares Applied Digital and EVERTEC”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Digital	$189.96 million	10.48	-$149.27 million	($1.17)	-8.05
EVERTEC	$823.71 million	2.63	$79.72 million	$1.28	26.60

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

Institutional and Insider Ownership

65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 96.8% of EVERTEC shares are owned by institutional investors. 11.8% of Applied Digital shares are owned by insiders. Comparatively, 0.8% of EVERTEC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Applied Digital and EVERTEC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Digital	-74.95%	-88.87%	-20.16%
EVERTEC	10.20%	33.01%	8.85%

Summary

EVERTEC beats Applied Digital on 8 of the 14 factors compared between the two stocks.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.

About EVERTEC

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; 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. In addition, the company 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 services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.