Ixia (NASDAQ: XXIA) and Oclaro (NASDAQ:OCLR) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Insider & Institutional Ownership

63.6% of Ixia shares are held by institutional investors. Comparatively, 71.0% of Oclaro shares are held by institutional investors. 24.4% of Ixia shares are held by company insiders. Comparatively, 2.3% of Oclaro shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Ixia and Oclaro, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ixia 0 3 1 0 2.25
Oclaro 0 0 10 1 3.09

Ixia presently has a consensus price target of $19.65, suggesting a potential upside of 0.00%. Oclaro has a consensus price target of $13.39, suggesting a potential upside of 58.98%. Given Oclaro’s stronger consensus rating and higher probable upside, analysts clearly believe Oclaro is more favorable than Ixia.

Profitability

This table compares Ixia and Oclaro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ixia -29.28% -28.71% -19.71%
Oclaro 21.28% 27.63% 20.69%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ixia N/A N/A N/A $0.12 163.76
Oclaro $600.97 million 2.36 $140.44 million $0.75 11.23

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

Risk & Volatility

Ixia has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Oclaro has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Summary

Oclaro beats Ixia on 11 of the 12 factors compared between the two stocks.

Ixia Company Profile

Ixia is a provider of physical and virtual network application performance and security resilience solutions. The Company’s product solutions consist of its hardware platforms, software applications and services, including warranty and maintenance offerings. The Company helps its customers to validate the performance and security resilience of their applications and networks. The Company offers network test hardware platforms with interchangeable interfaces, using a common set of applications and Application Programing Interfaces (APIs). The Company provides its solutions to network equipment manufacturers (NEMs), service providers, and enterprise and government organizations. The Company’s product solutions consist of its hardware platforms, such as chassis, interface cards and appliances, software application tools, and services, including its warranty and maintenance offerings and professional services.

Oclaro Company Profile

Oclaro, Inc. is a provider of optical components, modules and subsystems for the core optical transport, service provider, enterprise and data center markets. The Company provides various solutions for optical networks and interconnects driving the next wave of streaming video, cloud computing, application virtualization and other bandwidth-intensive and high-speed applications. The Company’s product offerings include client side transceivers, line side transceivers, tunable laser transmitters, lithium niobate modulators, transponder modules, and discrete lasers and receivers. It designs, manufactures and markets optical components, modules and subsystems that generate, detect, combine and separate light signals in optical communications networks. The Company supplies transmission products at the component level and the module level into 10 gigabits per second (Gb/s), 40 Gb/s and 100 Gb/s communications solutions.

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