Analyzing Aviat Networks (NASDAQ:AVNW) & ADTRAN (NASDAQ:ADTN)

Aviat Networks (NASDAQ:AVNW) and ADTRAN (NASDAQ:ADTN) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Risk & Volatility

Aviat Networks has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Institutional & Insider Ownership

78.6% of Aviat Networks shares are owned by institutional investors. Comparatively, 80.6% of ADTRAN shares are owned by institutional investors. 5.7% of Aviat Networks shares are owned by company insiders. Comparatively, 2.2% of ADTRAN shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Aviat Networks and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aviat Networks	0.58%	5.85%	2.49%
ADTRAN	-2.29%	14.24%	1.66%

Earnings and Valuation

This table compares Aviat Networks and ADTRAN”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aviat Networks	$439.68 million	0.58	$2.54 million	$0.19	103.53
ADTRAN	$1.08 billion	0.49	-$45.66 million	($0.28)	-23.39

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Aviat Networks and ADTRAN, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aviat Networks	1	1	8	0	2.70
ADTRAN	1	2	4	0	2.43

Aviat Networks presently has a consensus price target of $32.71, suggesting a potential upside of 66.32%. ADTRAN has a consensus price target of $14.67, suggesting a potential upside of 123.92%. Given ADTRAN’s higher probable upside, analysts clearly believe ADTRAN is more favorable than Aviat Networks.

Summary

Aviat Networks beats ADTRAN on 9 of the 14 factors compared between the two stocks.

About Aviat Networks

Aviat Networks, Inc. provides microwave networking and wireless access networking solutions in North America, Africa, the Middle East, Europe, Latin America, and the Asia Pacific. The company offers outdoor, indoor, and split-mount radios; microwave routers, switches, and trunking; and private LTE, virtual fiber, and element management products; and hosted software products, such as aviat design, frequency assurance software, and health assurance software. It also provides project services, which includes design and engineering, site and path surveys, assembly and integrations, project management, and install and commission; and managed services, such as network and interface monitoring, network health, onsite maintenance, and remote upgrades. In addition, the company offers support services, including extended warranty, warranty plus, provision support, and license key management, as well as instructor and virtual instructor led training, e-learning and certification services. It serves communications service providers and private network operators, including federal, state and local government agencies, transportation agencies, energy and utility companies, public safety agencies, and broadcast network operators. The company markets its products through a direct sales, service, and support organization; indirect sales channels comprising dealers, resellers, and sales representatives; and through online. Aviat Networks, Inc. company was incorporated in 2006 and is headquartered in Austin, Texas.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.