Applied Optoelectronics (AAOI) versus Clearfield (CLFD) Critical Review
Applied Optoelectronics (NASDAQ: AAOI) and Clearfield (NASDAQ:CLFD) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
This table compares Applied Optoelectronics and Clearfield’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for Applied Optoelectronics and Clearfield, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Applied Optoelectronics currently has a consensus target price of $58.13, indicating a potential upside of 49.08%. Clearfield has a consensus target price of $15.50, indicating a potential upside of 19.69%. Given Applied Optoelectronics’ higher possible upside, equities research analysts plainly believe Applied Optoelectronics is more favorable than Clearfield.
Institutional & Insider Ownership
76.7% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 29.1% of Clearfield shares are held by institutional investors. 8.2% of Applied Optoelectronics shares are held by insiders. Comparatively, 18.3% of Clearfield shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Applied Optoelectronics and Clearfield’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Applied Optoelectronics||$260.71 million||2.90||$31.23 million||$4.15||9.40|
|Clearfield||$73.95 million||2.42||$3.84 million||$0.28||46.25|
Applied Optoelectronics has higher revenue and earnings than Clearfield. Applied Optoelectronics is trading at a lower price-to-earnings ratio than Clearfield, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Applied Optoelectronics has a beta of 2.88, meaning that its stock price is 188% more volatile than the S&P 500. Comparatively, Clearfield has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.
Applied Optoelectronics beats Clearfield on 12 of the 15 factors compared between the two stocks.
About Applied Optoelectronics
Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.
Clearfield, Inc. manufactures, markets and sells fiber management and enclosure platform that consolidates, distributes and protects fiber as it moves from the inside plant to the outside plant and all the way to the home, business and cell site. The Company’s products include Clearview Cassette, which is the building block of its product platform; Connectivity and Optical Components; FieldSmart, which is a series of panels, cabinets, wall boxes and other enclosures that house the Clearview components; FieldShield, which is a fiber delivery method for broadband deployment; CraftSmart, which is a line of optical protection field enclosures, and Cable Assemblies. Its products are sold across broadband service providers, including traditional telephone companies, competitive local exchange carriers, multiple service operators (cable television), wireless service providers, and municipal-owned utilities that utilize fiber in their service offerings to businesses and consumers.
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