Acacia Communications (NASDAQ: ACIA) is one of 67 public companies in the “Communications & Networking” industry, but how does it weigh in compared to its rivals? We will compare Acacia Communications to related businesses based on the strength of its profitability, earnings, analyst recommendations, risk, dividends, institutional ownership and valuation.

Volatility and Risk

Acacia Communications has a beta of 3.31, meaning that its share price is 231% more volatile than the S&P 500. Comparatively, Acacia Communications’ rivals have a beta of 1.17, meaning that their average share price is 17% more volatile than the S&P 500.

Valuation and Earnings

This table compares Acacia Communications and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Acacia Communications $471.30 million $112.56 million 13.41
Acacia Communications Competitors $2.41 billion $618.33 million 27.40

Acacia Communications’ rivals have higher revenue and earnings than Acacia Communications. Acacia Communications is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

81.8% of Acacia Communications shares are held by institutional investors. Comparatively, 64.8% of shares of all “Communications & Networking” companies are held by institutional investors. 37.1% of Acacia Communications shares are held by insiders. Comparatively, 12.3% of shares of all “Communications & Networking” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Acacia Communications and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Communications 29.65% 34.46% 28.99%
Acacia Communications Competitors -2.11% -5.94% 0.30%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Acacia Communications and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 0 2 7 0 2.78
Acacia Communications Competitors 366 2396 3929 155 2.57

Acacia Communications currently has a consensus target price of $53.25, suggesting a potential upside of 17.45%. As a group, “Communications & Networking” companies have a potential upside of 23.85%. Given Acacia Communications’ rivals higher possible upside, analysts plainly believe Acacia Communications has less favorable growth aspects than its rivals.

Summary

Acacia Communications beats its rivals on 8 of the 13 factors compared.

Acacia Communications Company Profile

Acacia Communications, Inc. provides high-speed coherent interconnect products. The Company’s products include a series of low-power coherent digital signal processor application-specific integrated circuits (DSP ASICs), and silicon photonic integrated circuits (silicon PICs), which it has integrated into families of optical interconnect modules with transmission speeds ranging from 100 to 400 gigabits per second (Gbps) for use in long-haul, metro and inter-data center markets. The Company is also developing optical interconnect modules that will enable transmission speeds of one terabit (1,000 gigabits) per second and above. The Company’s modules perform a majority of the digital signal processing and optical functions in optical interconnects. The Company’s coherent DSP ASICs are manufactured using complementary metal oxide semiconductor (CMOS), and its silicon PICs are manufactured using a CMOS-compatible process.

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