Reviewing TELUS International (Cda) (NYSE:TIXT) & GoodRx (NASDAQ:GDRX)

TELUS International (Cda) (NYSE:TIXT) and GoodRx (NASDAQ:GDRX) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares TELUS International (Cda) and GoodRx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TELUS International (Cda)	2.70%	11.66%	4.96%
GoodRx	-7.57%	3.63%	1.72%

Insider & Institutional Ownership

59.6% of TELUS International (Cda) shares are owned by institutional investors. Comparatively, 63.8% of GoodRx shares are owned by institutional investors. 4.8% of TELUS International (Cda) shares are owned by insiders. Comparatively, 4.2% of GoodRx shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares TELUS International (Cda) and GoodRx”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TELUS International (Cda)	$2.71 billion	0.15	$54.00 million	$0.10	37.60
GoodRx	$750.27 million	2.47	-$8.87 million	($0.13)	-37.62

TELUS International (Cda) has higher revenue and earnings than GoodRx. GoodRx is trading at a lower price-to-earnings ratio than TELUS International (Cda), indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for TELUS International (Cda) and GoodRx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TELUS International (Cda)	2	13	1	0	1.94
GoodRx	1	4	9	1	2.67

TELUS International (Cda) currently has a consensus target price of $7.37, indicating a potential upside of 95.89%. GoodRx has a consensus target price of $9.36, indicating a potential upside of 91.35%. Given TELUS International (Cda)’s higher probable upside, equities research analysts clearly believe TELUS International (Cda) is more favorable than GoodRx.

Risk and Volatility

TELUS International (Cda) has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, GoodRx has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500.

Summary

TELUS International (Cda) beats GoodRx on 9 of the 15 factors compared between the two stocks.

About TELUS International (Cda)

TELUS International (Cda) Inc. design, builds, and delivers digital solutions for customer experience (CX) in the Asia-Pacific, the Central America, Europe, Africa, North America, and internationally. The company provides digital experience solutions, such as AI and bots, omnichannel CX, enterprise mobility solutions, cloud contact center, big data analytics, platform transformation, and UX/UI design; and customer experience solutions, including work anywhere/work from home, contact center outsourcing, technical support, sales growth and customer retention, healthcare/patient experience, and debt collection. It also offers IT lifecycle services comprising cloud platform solutions, managed IT services, application development and management, quality assurance and testing, system operations, IT service desk, internet of things, engineering solutions, and enterprise platform services; advisory services consists of digital strategy, CX process consulting, data and customer analytics, workforce management, learning excellence solutions, and business and process transformation; back office and automation solutions, such as robotic process automation, talent acquisition, finance and accounting, and supply chain management; and trust, safety, and security services, including content moderation and social media community management, and fraud prevention and detection. In addition, the company provides AI data solutions comprising data collection and creation, data annotation, data validation and relevance, and linguistic annotation for video, audio, text, image, and geographical data, as well as 3D sensor fusion. It serves technology and gaming, communications and media, ecommerce, financial services and financial technology, healthcare, travel and hospitality, and automotive industries. The company was founded in 2005 and is headquartered in Vancouver, Canada. TELUS International (Cda) Inc. operates as a subsidiary of TELUS Communications Inc.

About GoodRx

GoodRx Holdings, Inc., together with its subsidiaries, offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the United States. The company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and access to negotiated prices. It also offers other healthcare products and services, including subscriptions, and pharma manufacturer solutions, as well as telehealth services through the GoodRx Care platform. It serves pharmacy benefit managers who manage formularies and prescription transactions, including establishing pricing between consumers and pharmacies. The company was founded in 2011 and is headquartered in Santa Monica, California.