NeoPhotonics (NYSE:NPTN) and Pixelworks (NASDAQ:PXLW) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.
Profitability
This table compares NeoPhotonics and Pixelworks' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
NeoPhotonics | 2.26% | 10.55% | 5.29% |
Pixelworks | -51.96% | -31.06% | -20.07% |
Insider & Institutional Ownership
80.9% of NeoPhotonics shares are owned by institutional investors. Comparatively, 33.8% of Pixelworks shares are owned by institutional investors. 4.7% of NeoPhotonics shares are owned by company insiders. Comparatively, 4.6% of Pixelworks shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares NeoPhotonics and Pixelworks' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
NeoPhotonics | $356.80 million | 1.30 | $-17,080,000.00 | ($0.23) | -40.13 |
Pixelworks | $68.75 million | 2.28 | $-9,080,000.00 | ($0.12) | -31.08 |
Pixelworks has lower revenue, but higher earnings than NeoPhotonics. NeoPhotonics is trading at a lower price-to-earnings ratio than Pixelworks, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
NeoPhotonics has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Pixelworks has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for NeoPhotonics and Pixelworks, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
NeoPhotonics | 1 | 4 | 5 | 0 | 2.40 |
Pixelworks | 0 | 1 | 2 | 0 | 2.67 |
NeoPhotonics presently has a consensus target price of $11.1667, suggesting a potential upside of 20.98%. Pixelworks has a consensus target price of $5.0833, suggesting a potential upside of 36.28%. Given Pixelworks' stronger consensus rating and higher probable upside, analysts plainly believe Pixelworks is more favorable than NeoPhotonics.
Summary
NeoPhotonics beats Pixelworks on 8 of the 14 factors compared between the two stocks.