GDS (GDS) & The Competition Critical Review

GDS (NASDAQ: GDS) is one of 44 public companies in the “Computer programming, data processing, & other computer related” industry, but how does it contrast to its peers? We will compare GDS to similar businesses based on the strength of its dividends, institutional ownership, analyst recommendations, valuation, earnings, risk and profitability.

Risk and Volatility

GDS has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500. Comparatively, GDS’s peers have a beta of 1.41, suggesting that their average share price is 41% more volatile than the S&P 500.



Valuation & Earnings

This table compares GDS and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
GDS $248.40 million -$48.38 million -50.25
GDS Competitors $6.96 billion $964.57 million 38.76

GDS’s peers have higher revenue and earnings than GDS. GDS is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

20.9% of GDS shares are owned by institutional investors. Comparatively, 49.1% of shares of all “Computer programming, data processing, & other computer related” companies are owned by institutional investors. 15.3% of shares of all “Computer programming, data processing, & other computer related” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares GDS and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GDS -20.29% -10.11% -3.20%
GDS Competitors -16.11% -46.83% -1.83%

Analyst Ratings

This is a summary of current ratings for GDS and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GDS 1 0 2 0 2.33
GDS Competitors 507 1902 4620 228 2.63

GDS currently has a consensus price target of $29.03, indicating a potential upside of 13.28%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 8.53%. Given GDS’s higher possible upside, analysts clearly believe GDS is more favorable than its peers.

Summary

GDS peers beat GDS on 8 of the 12 factors compared.

About GDS

GDS Holdings Ltd is a developer and operator of data centers in China. The Company is engaged in design, build-out and operation of data centers. It operates as a carrier and cloud neutral, which enables its customers to connect to all the People’s Republic of China telecommunications carriers, and to access a number of the People’s Republic of China cloud service providers, whom it hosts in its facilities. The Company’s base of approximately 370 customers consists of Internet companies, financial institutions, telecommunications and information technology (IT) service providers, and domestic private sector and multinational corporations. It serves a community of approximately 160 People’s Republic of China and foreign financial institutions across the banking, insurance, asset management, brokerage, digital payment and financial information verticals. The Company operates its data centers in Shanghai, Beijing, Shenzhen, Guangzhou and Chengdu.

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