Resonant (NASDAQ: RESN) and Cavium (NASDAQ:CAVM) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Risk & Volatility

Resonant has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Cavium has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Valuation and Earnings

This table compares Resonant and Cavium’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Resonant $300,000.00 266.80 -$15.24 million ($1.37) -3.48
Cavium $603.31 million 8.86 -$147.20 million ($2.82) -27.43

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

Profitability

This table compares Resonant and Cavium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Resonant -2,772.35% -150.45% -125.40%
Cavium -19.94% 11.16% 5.23%

Insider and Institutional Ownership

4.5% of Resonant shares are held by institutional investors. 22.3% of Resonant shares are held by insiders. Comparatively, 4.7% of Cavium shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Resonant and Cavium, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Resonant 0 0 3 0 3.00
Cavium 0 4 13 0 2.76

Resonant currently has a consensus target price of $8.00, indicating a potential upside of 67.71%. Cavium has a consensus target price of $78.00, indicating a potential upside of 0.84%. Given Resonant’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Resonant is more favorable than Cavium.

Summary

Resonant beats Cavium on 7 of the 13 factors compared between the two stocks.

Resonant Company Profile

Resonant Inc. is a late-stage development company. The Company creates filter designs for radio frequency (RF) front-ends for the mobile device industry. The RF front-end is the circuitry in a mobile device for analog signal processing and is located between the device’s antenna and its digital baseband. The Company uses a technology called Infinite Synthesized Networks (ISN) to configure and connect resonators, the building blocks of RF filters. The Company uses ISN to develop new classes of filter designs. The Company is also developing a series of single-band surface acoustic wave (SAW) filter designs for frequency bands. The Company is developing multiplexer filter designs for over two bands to address the carrier aggregation (CA) requirements of its customers. In addition, the Company is also developing reconfigurable filter designs to replace multiple filters for multiple bands. The Company is also involved in the development of a filter reconfigurable between three bands.

Cavium Company Profile

Cavium, Inc. is a provider of integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Company’s products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance. A range of its products also include a suite of embedded security protocols that enable unified threat management (UTM), secure connectivity, network perimeter protection and deep packet inspection (DPI). The Company sells its products to networking original equipment manufacturers (OEM), which sell into the enterprise, datacenter, service provider, and broadband and consumer markets. In the enterprise market, its products are used in routers, switches, storage appliances, server connectivity for networking and storage, wireless local area networks and UTM.

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