Acacia Communications (NASDAQ:ACIA) versus Solaredge Technologies (NASDAQ:SEDG) Head-To-Head Contrast

Acacia Communications (NASDAQ:ACIA) and Solaredge Technologies (NASDAQ:SEDG) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

This table compares Acacia Communications and Solaredge Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Communications 6.58% 8.57% 6.89%
Solaredge Technologies 8.39% 15.89% 9.08%

Earnings and Valuation

This table compares Acacia Communications and Solaredge Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Communications $339.89 million 8.34 $4.92 million $0.15 458.13
Solaredge Technologies $937.24 million 5.77 $128.83 million $2.69 41.32

Solaredge Technologies has higher revenue and earnings than Acacia Communications. Solaredge Technologies is trading at a lower price-to-earnings ratio than Acacia Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Acacia Communications and Solaredge Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 1 10 2 0 2.08
Solaredge Technologies 0 4 8 0 2.67

Acacia Communications currently has a consensus target price of $58.50, suggesting a potential downside of 14.87%. Solaredge Technologies has a consensus target price of $93.33, suggesting a potential downside of 16.04%. Given Acacia Communications’ higher possible upside, equities analysts plainly believe Acacia Communications is more favorable than Solaredge Technologies.

Insider and Institutional Ownership

78.6% of Acacia Communications shares are owned by institutional investors. Comparatively, 80.9% of Solaredge Technologies shares are owned by institutional investors. 9.3% of Acacia Communications shares are owned by insiders. Comparatively, 7.9% of Solaredge Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Acacia Communications has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, Solaredge Technologies has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500.

Summary

Solaredge Technologies beats Acacia Communications on 9 of the 14 factors compared between the two stocks.

About Acacia Communications

Acacia Communications, Inc. develops, manufactures, and sells high-speed coherent optical interconnect products in the United States, China, Germany, Thailand, and internationally. The company offers embedded and pluggable module products consisting of optical interconnect modules with transmission speeds ranging from 100 to 1,200 gigabits per second for use in long-haul, metro, and inter-data center markets. It also provides semiconductor products, such as low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits that are integrated into embedded and pluggable modules. The company sells its products through a direct sales force to network equipment manufacturers, network operators, and cloud service providers. Acacia Communications, Inc. was founded in 2009 and is headquartered in Maynard, Massachusetts.

About Solaredge Technologies

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations worldwide. Its SolarEdge system consists of power optimizers, inverters, communication and smart energy management solutions, and a cloud based monitoring platform. The company's products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. It also provides pre-sales support, ongoing trainings, and technical support and after installation services; and lithium-ion cells, batteries, and energy storage solutions for various industries, including energy storage systems, residential and commercial solar systems, uninterruptible power supplies, electric vehicles, aerospace, marine, and others. The company sells its products to the providers of solar PV systems; and solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was founded in 2006 and is headquartered in Herzliya, Israel.

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