Alpha and Omega Semiconductor (NASDAQ:AOSL) and Applied Optoelectronics (NASDAQ:AAOI) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.
Institutional and Insider Ownership
58.7% of Alpha and Omega Semiconductor shares are owned by institutional investors. Comparatively, 47.5% of Applied Optoelectronics shares are owned by institutional investors. 21.6% of Alpha and Omega Semiconductor shares are owned by company insiders. Comparatively, 7.2% of Applied Optoelectronics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Alpha and Omega Semiconductor and Applied Optoelectronics' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Alpha and Omega Semiconductor | $464.91 million | 1.78 | $-6,600,000.00 | $0.47 | 68.30 |
| Applied Optoelectronics | $190.87 million | 1.10 | $-66,050,000.00 | ($1.45) | -5.44 |
Alpha and Omega Semiconductor has higher revenue and earnings than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than Alpha and Omega Semiconductor, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and recommmendations for Alpha and Omega Semiconductor and Applied Optoelectronics, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Alpha and Omega Semiconductor | 0 | 0 | 2 | 0 | 3.00 |
| Applied Optoelectronics | 1 | 5 | 1 | 0 | 2.00 |
Alpha and Omega Semiconductor presently has a consensus price target of $46.50, suggesting a potential upside of 44.86%. Applied Optoelectronics has a consensus price target of $12.70, suggesting a potential upside of 60.96%. Given Applied Optoelectronics' higher possible upside, analysts plainly believe Applied Optoelectronics is more favorable than Alpha and Omega Semiconductor.
Profitability
This table compares Alpha and Omega Semiconductor and Applied Optoelectronics' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Alpha and Omega Semiconductor | 0.39% | 4.47% | 2.50% |
| Applied Optoelectronics | -34.83% | -11.67% | -6.48% |
Volatility & Risk
Alpha and Omega Semiconductor has a beta of 2.53, suggesting that its share price is 153% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500.
Summary
Alpha and Omega Semiconductor beats Applied Optoelectronics on 13 of the 14 factors compared between the two stocks.
