Applied Optoelectronics (NASDAQ:AAOI) and Nlight (NASDAQ:LASR) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
Profitability
This table compares Applied Optoelectronics and Nlight's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Applied Optoelectronics | -40.52% | -11.37% | -6.85% |
| Nlight | -10.74% | -6.30% | -5.32% |
Insider & Institutional Ownership
58.9% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 77.0% of Nlight shares are held by institutional investors. 7.2% of Applied Optoelectronics shares are held by insiders. Comparatively, 5.5% of Nlight shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Applied Optoelectronics and Nlight's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Applied Optoelectronics | $190.87 million | 1.23 | $-66,050,000.00 | ($1.45) | -7.99 |
| Nlight | $176.62 million | 5.04 | $-12,880,000.00 | ($0.24) | -96.29 |
Nlight has lower revenue, but higher earnings than Applied Optoelectronics. Nlight is trading at a lower price-to-earnings ratio than Applied Optoelectronics, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings for Applied Optoelectronics and Nlight, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Applied Optoelectronics | 2 | 3 | 0 | 0 | 1.60 |
| Nlight | 0 | 0 | 5 | 1 | 3.17 |
Applied Optoelectronics presently has a consensus target price of $9.60, suggesting a potential downside of 17.10%. Nlight has a consensus target price of $22.8333, suggesting a potential downside of 1.20%. Given Nlight's stronger consensus rating and higher possible upside, analysts plainly believe Nlight is more favorable than Applied Optoelectronics.
Risk & Volatility
Applied Optoelectronics has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, Nlight has a beta of 2.78, indicating that its share price is 178% more volatile than the S&P 500.
Summary
Nlight beats Applied Optoelectronics on 12 of the 15 factors compared between the two stocks.
