NeoPhotonics (NYSE:NPTN) and Sequans Communications (NYSE:SQNS) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.
Earnings & Valuation
This table compares NeoPhotonics and Sequans Communications' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| NeoPhotonics | $356.80 million | 1.33 | $-17,080,000.00 | ($0.23) | -41.04 |
| Sequans Communications | $30.86 million | 5.12 | $-36,700,000.00 | ($1.37) | -4.82 |
NeoPhotonics has higher revenue and earnings than Sequans Communications. NeoPhotonics is trading at a lower price-to-earnings ratio than Sequans Communications, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for NeoPhotonics and Sequans Communications, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| NeoPhotonics | 1 | 4 | 5 | 0 | 2.40 |
| Sequans Communications | 0 | 0 | 3 | 0 | 3.00 |
NeoPhotonics currently has a consensus price target of $11.1667, indicating a potential upside of 17.42%. Sequans Communications has a consensus price target of $10.1667, indicating a potential upside of 54.04%. Given Sequans Communications' stronger consensus rating and higher possible upside, analysts plainly believe Sequans Communications is more favorable than NeoPhotonics.
Profitability
This table compares NeoPhotonics and Sequans Communications' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| NeoPhotonics | 2.26% | 10.55% | 5.29% |
| Sequans Communications | -106.29% | N/A | -43.54% |
Volatility and Risk
NeoPhotonics has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.
Insider & Institutional Ownership
80.9% of NeoPhotonics shares are owned by institutional investors. Comparatively, 51.6% of Sequans Communications shares are owned by institutional investors. 4.7% of NeoPhotonics shares are owned by company insiders. Comparatively, 9.4% of Sequans Communications shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
NeoPhotonics beats Sequans Communications on 10 of the 14 factors compared between the two stocks.
