Critical Review: Lantronix (NASDAQ:LTRX) versus Vecima Networks (OTCMKTS:VNWTF)

Vecima Networks (OTCMKTS:VNWTF) and Lantronix (NASDAQ:LTRX) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Vecima Networks and Lantronix”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vecima Networks	N/A	N/A	N/A	$1.04	8.86
Lantronix	$122.92 million	2.14	-$11.37 million	($0.17)	-35.12

Vecima Networks has higher earnings, but lower revenue than Lantronix. Lantronix is trading at a lower price-to-earnings ratio than Vecima Networks, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Vecima Networks and Lantronix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vecima Networks	N/A	N/A	N/A
Lantronix	-5.52%	-6.79%	-4.17%

Analyst Recommendations

This is a summary of current ratings and target prices for Vecima Networks and Lantronix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vecima Networks	0	0	1	0	3.00
Lantronix	1	0	6	0	2.71

Lantronix has a consensus target price of $10.40, indicating a potential upside of 74.20%. Given Lantronix’s higher probable upside, analysts clearly believe Lantronix is more favorable than Vecima Networks.

Insider & Institutional Ownership

0.3% of Vecima Networks shares are owned by institutional investors. Comparatively, 39.4% of Lantronix shares are owned by institutional investors. 2.4% of Lantronix shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Vecima Networks beats Lantronix on 6 of the 11 factors compared between the two stocks.

About Vecima Networks

Vecima Networks Inc. engages in the development of integrated hardware and software solutions for broadband access, content delivery, and telematics. The company operates through three segments: Video and Broadband Solutions, Content Delivery and Storage, and Telematics. The Video and Broadband Solutions segment offers platforms that process data from the cable network and deliver high-speed internet connectivity to homes over cable and fiber, as well as adapt video services. Its principal products include Terrace and TerraceQAM, which are designed to meet the needs of the business services verticals, such as multi- dwelling unit, hotels, motels, and resorts; and Entra distributed access architecture platform comprising EntraPHY, EntraMAC, EntraOptical, EntraControl, and EntraVideo that addresses the network migration to a distributed access architecture. The Content Delivery and Storage segment offers solutions and software for service providers and content owners that focus on ingesting, producing, storing, delivering, and streaming video for live linear, video on demand, network digital video recorder, and time-shifted services over the internet under the MediaScale brand. The Telematics segment provides information and analytics for fleet managers to manage their mobile and fixed assets under the Contigo and Nero Global Tracking brands. The company also offers optical access nodes, Terrace QAM, Terrace TC600E, Terrace IQ, Entra FPXT-B, Enra access code, Entra access controller, Entra access switch, Entra Remote PHY Monitor, Entra Video QAM Manager, MediaScale Origin, MediaScale storage, and MediaScale transcode. In addition, it provides engineering and consultation services; lifecycle program management; installation and commission; training and certification; workforce optimization; and operations and customer support services. The company was incorporated in 1988 and is headquartered in Victoria, Canada. Vecima Networks Inc. is a subsidiary of 684739 B.C. Ltd.

About Lantronix

Lantronix, Inc. provides solutions for video surveillance, infotainment systems, and intelligent substations infrastructure in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT System Solutions, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; Embedded IoT Modules, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and Software and Engineering Services offers SaaS platform that enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login. It also offers telematics devices, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management; network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development. In addition, the company provides console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms; and hardware engineering, software engineering, and mechanical engineering, rapid prototyping and quality assurance engineering services. Lantronix, Inc. was incorporated in 1989 and is based in Irvine, California.