Financial Analysis: nLight (NASDAQ:LASR) vs. Ceva (NASDAQ:CEVA)

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

Earnings & Valuation

This table compares nLight and Ceva”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
nLight	$198.55 million	9.06	-$60.79 million	($0.88)	-40.26
Ceva	$107.53 million	4.74	-$8.79 million	($0.46)	-46.17

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
nLight	1	1	5	1	2.75
Ceva	1	0	5	0	2.67

nLight currently has a consensus target price of $32.67, suggesting a potential downside of 7.80%. Ceva has a consensus target price of $34.20, suggesting a potential upside of 61.02%. Given Ceva’s higher possible upside, analysts plainly believe Ceva is more favorable than nLight.

Profitability

This table compares nLight and Ceva’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
nLight	-19.13%	-17.11%	-12.81%
Ceva	-10.49%	-3.54%	-3.08%

Insider and Institutional Ownership

83.9% of nLight shares are held by institutional investors. Comparatively, 85.4% of Ceva shares are held by institutional investors. 6.1% of nLight shares are held by company insiders. Comparatively, 2.4% of Ceva shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

nLight has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500. Comparatively, Ceva has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

About nLight

nLIGHT, Inc. designs, develops, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. The company operates in two segments, Laser Products and Advanced Development. It offers semiconductor lasers with various ranges of power levels, wavelengths, and output fiber sizes; and programmable and serviceable fiber lasers for use in industrial and aerospace and defense applications. The company also provides laser sensors, including light detection and ranging technologies for intelligence, surveillance, and reconnaissance applications; and fiber amplifiers, beam combination, and control systems for use in high-energy laser systems in directed energy applications. It sells its products through direct sales force in the United States, China, South Korea, and European countries, as well as through independent sales representatives and distributors in Asia, Australia, Europe, the Middle East, and South America. The company was formerly known as nLight Photonics Corporation and changed its name to nLIGHT, Inc. in January 2016. nLIGHT, Inc. was incorporated in 2000 and is headquartered in Camas, Washington.

About Ceva

CEVA, Inc. provides silicon and software IP solutions to semiconductor and original equipment manufacturer (OEM) companies worldwide. Its 5G mobile and infrastructure products include Ceva-XC vector digital signal processors (DSPs) for 5G handsets, 5G RAN, and general-purpose baseband processing; PentaG-RAN, an open ran platform for base station and radio; and PentaG2 – 5G NR modem platform for UE, as well as for non-handset 5G vertical markets, such as fixed wireless access, industry 4.0, robotics, and AR/VR devices. The company’s wireless IoT products comprise RivieraWaves’ Bluetooth 5dual mode and low energy platforms, RivieraWaves’ Wi-Fi platforms, ultra-wide band platforms, and Cellular IoT and RedCap platforms, as well as sense and inference processors and platforms consist of NeuPro-M neural processing unit (NPU) family; SensPro2 sensor hub AI platforms addressing imaging, vision, powertrain, and applications, including DSP processors, AI accelerators, and a software portfolio; and Ceva-BX1 and Ceva-BX2 audio AI DSPs. Its sensing and audio software comprise RealSpace spatial audio software package; WhisPro speech recognition; ClearVox, a voice front-end software package for voice-enabled devices; and CDNN, a neural network graph compiler that enables AI developers to automatically compile, optimize, and run pre-trained networks onto embedded devices. The company’s application software IP are licensed primarily to OEMs who embed it in their system on chip designs. It delivers AI DSPs and NPUs in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools, which facilitate system design, debug, and software development. The company licenses its technology through a direct sales force. CEVA, Inc. was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003. The company was incorporated in 1999 and is headquartered in Rockville, Maryland.