Alpha and Omega Semiconductor (NASDAQ: AOSL) and Aquantia (NYSE:AQ) are both small-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Alpha and Omega Semiconductor and Aquantia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alpha and Omega Semiconductor 0 1 3 0 2.75
Aquantia 0 0 5 0 3.00

Alpha and Omega Semiconductor presently has a consensus price target of $25.00, indicating a potential upside of 40.92%. Aquantia has a consensus price target of $14.80, indicating a potential upside of 39.10%. Given Alpha and Omega Semiconductor’s higher possible upside, research analysts clearly believe Alpha and Omega Semiconductor is more favorable than Aquantia.

Profitability

This table compares Alpha and Omega Semiconductor and Aquantia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alpha and Omega Semiconductor 3.92% 4.85% 3.78%
Aquantia N/A N/A N/A

Earnings and Valuation

This table compares Alpha and Omega Semiconductor and Aquantia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alpha and Omega Semiconductor $383.34 million 1.11 $13.82 million $0.61 29.08
Aquantia $86.67 million 4.11 -$440,000.00 ($0.31) -34.32

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

Institutional & Insider Ownership

70.5% of Alpha and Omega Semiconductor shares are owned by institutional investors. 21.7% of Alpha and Omega Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Alpha and Omega Semiconductor beats Aquantia on 10 of the 13 factors compared between the two stocks.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited is a designer, developer and global supplier of power semiconductors. The Company’s portfolio of power semiconductors includes approximately 1,600 products, as of June 30, 2016. The Company’s product portfolio consists of two categories: power discretes and power integrated circuits (ICs). The Company’s portfolio of products focuses high-volume applications, including personal computers, flat panel televisions, light-emitting diode (LED) lighting, smart phones, battery packs, consumer and industrial motor controls and power supplies for television, computers, servers and telecommunications equipment. The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. The Company conducts its operations primarily in the United States, Hong Kong, China, Taiwan, Korea and Japan. Its products are applicable in desktop and tablet personal computers, flat panel displays and televisions.

About Aquantia

Aquantia Corp is engaged in developing and supplying connectivity solutions for data centers, enterprise and wireless local area network (WLAN) applications. The Company offers 10 gigabyte Ethernet and Multi-Gig Ethernet Silicon product for data center and cloud, and the enterprise and WLAN markets. For data center and cloud market, it offers 10GBASE-T PHYs product line, which includes 28 nanometer technology products, such as AQ2402, AQ2403, AQ2203 and AQ2104; 40 nanometer technology products, such as AQ1402, AQ1202 and AQ1103, and 90 nanometer technology product, AQ1002. For enterprise and WLAN market, it offers AQrate product line, including 28 nanometer technology products, such as AQR405, AQR205 and AQR105. Its AQrate product line consists of single, dual and quad-port configurations for applications ranging from client personal computers and others for single and dual-port devices, to Enterprise and Campus Ethernet switches for the quad-port versions.

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