Contrasting Fabrinet (FN) & CyberOptics Corporation (CYBE)

CyberOptics Corporation (NASDAQ: CYBE) and Fabrinet (NYSE:FN) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for CyberOptics Corporation and Fabrinet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CyberOptics Corporation 0 0 3 0 3.00
Fabrinet 0 0 4 1 3.20

CyberOptics Corporation currently has a consensus target price of $35.00, suggesting a potential upside of 140.55%. Fabrinet has a consensus target price of $53.55, suggesting a potential upside of 33.61%. Given CyberOptics Corporation’s higher possible upside, equities analysts plainly believe CyberOptics Corporation is more favorable than Fabrinet.

Profitability

This table compares CyberOptics Corporation and Fabrinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CyberOptics Corporation 14.32% 5.94% 4.85%
Fabrinet 6.74% 14.95% 9.71%

Earnings and Valuation

This table compares CyberOptics Corporation and Fabrinet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CyberOptics Corporation $56.82 million 1.79 $5.03 million $1.13 12.88
Fabrinet $1.33 billion 1.12 $121.84 million $2.38 16.84

Fabrinet has higher revenue and earnings than CyberOptics Corporation. CyberOptics Corporation is trading at a lower price-to-earnings ratio than Fabrinet, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

56.1% of CyberOptics Corporation shares are held by institutional investors. Comparatively, 95.1% of Fabrinet shares are held by institutional investors. 4.8% of CyberOptics Corporation shares are held by company insiders. Comparatively, 4.3% of Fabrinet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

CyberOptics Corporation has a beta of -0.39, indicating that its stock price is 139% less volatile than the S&P 500. Comparatively, Fabrinet has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Summary

Fabrinet beats CyberOptics Corporation on 11 of the 15 factors compared between the two stocks.

About CyberOptics Corporation

Cyberoptics Corporation is a developer and manufacturer of sensing technology solutions. The Company’s products and services are used in the surface mount technology (SMT), semiconductor and three dimensional (3D) scanning solutions and services markets. Its products are sold into the electronics assembly, dynamic random access memory (DRAM) and flash memory, and semiconductor fabrication capital equipment markets. The Company develops, manufactures and sells non-contact sensors and systems for process control and inspection, and general purpose metrology. The Company’s product offerings are sold to original equipment manufacturers (OEMs) and end user customers in the SMT circuit board assembly, semiconductor and general-purpose metrology markets. Its OEMs incorporate the Company’s sensor offerings into capital equipment serving these industries. The Company also sells standalone inspection systems that are sold directly to circuit board assembly companies.

About Fabrinet

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.

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