Fabrinet (NYSE: FN) and Neonode (NASDAQ:NEON) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.
Risk and Volatility
Fabrinet has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, Neonode has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Fabrinet and Neonode, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Fabrinet presently has a consensus price target of $53.55, indicating a potential upside of 30.61%. Neonode has a consensus price target of $3.00, indicating a potential upside of 197.03%. Given Neonode’s higher probable upside, analysts clearly believe Neonode is more favorable than Fabrinet.
Earnings and Valuation
This table compares Fabrinet and Neonode’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fabrinet||$1.33 billion||1.15||$121.84 million||$2.38||17.23|
|Neonode||$9.41 million||5.24||-$3.47 million||($0.10)||-10.10|
Fabrinet has higher revenue and earnings than Neonode. Neonode is trading at a lower price-to-earnings ratio than Fabrinet, indicating that it is currently the more affordable of the two stocks.
This table compares Fabrinet and Neonode’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
94.1% of Fabrinet shares are owned by institutional investors. Comparatively, 25.3% of Neonode shares are owned by institutional investors. 4.3% of Fabrinet shares are owned by insiders. Comparatively, 15.8% of Neonode shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Fabrinet beats Neonode on 10 of the 14 factors compared between the two stocks.
Fabrinet provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (OEMs) of products, such as optical communication components, modules and sub-systems, industrial lasers, medical devices and sensors. The Company offers a range of optical and electro-mechanical capabilities across the manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and test. The Company’s customer base includes companies in industries that require precision manufacturing capabilities, such as optical communications, industrial lasers, automotive, medical and sensors. Its customers in these industries support end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.
Neonode Inc., formerly SBE, Inc., develops and licenses user interfaces and optical infrared touch solutions. The Company’s technology offers multiple features, including the ability to sense an object’s size, depth, velocity, pressure and proximity to any type of surface. It operates through the touch technology licensing business segment. It licenses its multi-touch technology to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who incorporate it into devices that they produce and sell. In addition, it develops prototype products and is engaged in product engineering design discussions with various global OEMs and ODMs. The Company offers its family of touch solutions under the brands MultiSensing and zForce. Its solution provides sense enablement through touch and proximity sensing. Its technology has application in various fields, such as laptop computers, all-in-one computers, standalone monitors, printer products and global positioning systems.
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