Head to Head Analysis: EMCORE (NASDAQ:EMKR) versus Nlight (NASDAQ:LASR)

EMCORE (NASDAQ:EMKR) and Nlight (NASDAQ:LASR) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for EMCORE and Nlight, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMCORE 0 0 3 0 3.00
Nlight 0 2 3 0 2.60

EMCORE currently has a consensus price target of $4.73, indicating a potential upside of 55.70%. Nlight has a consensus price target of $20.40, indicating a potential upside of 27.98%. Given EMCORE’s stronger consensus rating and higher probable upside, equities analysts clearly believe EMCORE is more favorable than Nlight.

Institutional & Insider Ownership

54.5% of EMCORE shares are held by institutional investors. Comparatively, 80.0% of Nlight shares are held by institutional investors. 1.4% of EMCORE shares are held by insiders. Comparatively, 5.8% of Nlight shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares EMCORE and Nlight’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMCORE -35.81% -22.49% -16.20%
Nlight -7.29% -3.93% -3.41%

Risk and Volatility

EMCORE has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Nlight has a beta of 2.45, suggesting that its stock price is 145% more volatile than the S&P 500.

Valuation & Earnings

This table compares EMCORE and Nlight’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EMCORE $87.26 million 1.01 -$35.98 million ($0.71) -4.28
Nlight $176.62 million 3.41 -$12.88 million ($0.24) -66.42

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

Summary

Nlight beats EMCORE on 10 of the 13 factors compared between the two stocks.

About EMCORE

EMCORE Corporation, together with its subsidiaries, provides advanced mixed-signal optics products in California. It offers broadband products comprising cable television; laser, receiver, and photodetector component products; radio frequency over glass FTTP products; satellite/microwave communications products; and wireless communications products. The company also provides chip devices products, including high-power gain chips, GPON fiber-to-the-premises, and data center chip products; and navigation systems products, such as fiber optic gyroscope products and inertial measurement units and navigation systems products. It sells its products through direct sales force, application engineers, third party sales representatives, and distributors. EMCORE Corporation was founded in 1984 and is headquartered in Alhambra, California.

About Nlight

nLIGHT, Inc. designs, develops, and manufactures semiconductor and fiber lasers used in the industrial, microfabrication, and aerospace and defense markets. The company also produces optical fiber products. It markets and sells its products to original equipment manufacturer primarily through direct sales force in the United States, China, South Korea, Germany, and Finland, as well as through various independent sales representatives and distributors in Asia and Europe. The company was formerly known as nLight Photonics Corporation and changed its name to nLIGHT, Inc. in January 2016. nLIGHT, Inc. was founded in 2000 and is headquartered in Vancouver, Washington.

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