NeoPhotonics Corporation (NYSE: NPTN) and TTM Technologies (NASDAQ:TTMI) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitabiliy, institutional ownership, earnings, dividends, risk and analyst recommendations.

Profitability

This table compares NeoPhotonics Corporation and TTM Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NeoPhotonics Corporation -3.66% -3.51% -2.05%
TTM Technologies 2.92% 18.17% 6.05%

Institutional and Insider Ownership

84.5% of NeoPhotonics Corporation shares are owned by institutional investors. Comparatively, 95.2% of TTM Technologies shares are owned by institutional investors. 16.4% of NeoPhotonics Corporation shares are owned by insiders. Comparatively, 28.4% of TTM Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares NeoPhotonics Corporation and TTM Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NeoPhotonics Corporation $383.97 million 1.00 $11.53 million ($0.34) -26.09
TTM Technologies $2.58 billion 0.71 $392.81 million $0.71 25.49

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

Analyst Recommendations

This is a summary of current ratings and target prices for NeoPhotonics Corporation and TTM Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NeoPhotonics Corporation 0 1 4 2 3.14
TTM Technologies 0 0 3 0 3.00

NeoPhotonics Corporation presently has a consensus target price of $13.04, suggesting a potential upside of 47.03%. TTM Technologies has a consensus target price of $20.00, suggesting a potential upside of 10.50%. Given NeoPhotonics Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe NeoPhotonics Corporation is more favorable than TTM Technologies.

Volatility and Risk

NeoPhotonics Corporation has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, TTM Technologies has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Summary

TTM Technologies beats NeoPhotonics Corporation on 9 of the 14 factors compared between the two stocks.

NeoPhotonics Corporation Company Profile

NeoPhotonics Corporation develops, manufactures and markets optoelectronic products that transmit, receive and switch digital optical signals for communications networks. The Company develops and manufactures Transmitter Products, Receiver Products and Switch Products that are used in ultra-high speed digital optical communications, high speed switching and provisioning, and access connections for wireless and fiber-to-the-home communications networks. The Company’s products are categorized into groups, including High Speed Products and Network Products and Solutions. The High Speed Products includes products designed for 100G and beyond for telecommunication and datacenter or content provider networks and applications. Its Network Products and Solutions consist of various products designed for applications below 100G, and include 40G products. The Company combines its transmitter and receiver products into Transceiver modules.

TTM Technologies Company Profile

TTM Technologies, Inc. is a manufacturer of printed circuit board (PCB) products and is focused on technologically advanced PCBs and electro-mechanical solutions (E-M Solutions). As of January 2, 2017, the Company operated a total of 25 specialized facilities in North America and China. The Company’s segments include PCB, E-M Solutions and Corporate. As of January 2, 2017, the PCB segment included 13 domestic PCB fabrication plants, including a facility that provides follow-on value-added services primarily for one of the PCB fabrication plants; eight PCB fabrication plants in China and one in Canada. As of January 2, 2017, the E-M Solutions included three custom electronic assembly plants in China. The Company offers a range of PCB products, including conventional PCBs, high density interconnect (HDI) PCBs, flexible PCBs, rigid-flex PCBs, custom assemblies and system integration, and integrated circuits (IC) substrates.

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