LightPath Technologies (NASDAQ:LPTH) and Applied Optoelectronics (NASDAQ:AAOI) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of current recommendations for LightPath Technologies and Applied Optoelectronics, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| LightPath Technologies | 0 | 0 | 3 | 0 | 3.00 |
| Applied Optoelectronics | 1 | 5 | 1 | 0 | 2.00 |
LightPath Technologies currently has a consensus price target of $5.1667, suggesting a potential upside of 79.40%. Applied Optoelectronics has a consensus price target of $12.70, suggesting a potential upside of 53.94%. Given LightPath Technologies' stronger consensus rating and higher probable upside, research analysts plainly believe LightPath Technologies is more favorable than Applied Optoelectronics.
Earnings and Valuation
This table compares LightPath Technologies and Applied Optoelectronics' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| LightPath Technologies | $34.97 million | 2.16 | $870,000.00 | $0.03 | 96.33 |
| Applied Optoelectronics | $190.87 million | 1.15 | $-66,050,000.00 | ($1.45) | -5.68 |
LightPath Technologies has higher earnings, but lower revenue than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than LightPath Technologies, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares LightPath Technologies and Applied Optoelectronics' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| LightPath Technologies | 6.33% | 7.46% | 5.42% |
| Applied Optoelectronics | -34.83% | -11.67% | -6.48% |
Volatility and Risk
LightPath Technologies has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500.
Insider & Institutional Ownership
24.3% of LightPath Technologies shares are held by institutional investors. Comparatively, 47.5% of Applied Optoelectronics shares are held by institutional investors. 11.5% of LightPath Technologies shares are held by insiders. Comparatively, 7.2% of Applied Optoelectronics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
LightPath Technologies beats Applied Optoelectronics on 11 of the 14 factors compared between the two stocks.
