Xcerra Corporation (NASDAQ: XCRA) and Photronics (NASDAQ:PLAB) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Xcerra Corporation and Photronics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra Corporation 0 5 0 0 2.00
Photronics 0 2 1 0 2.33

Xcerra Corporation presently has a consensus price target of $10.25, indicating a potential upside of 4.91%. Photronics has a consensus price target of $12.00, indicating a potential upside of 50.94%. Given Photronics’ stronger consensus rating and higher possible upside, analysts clearly believe Photronics is more favorable than Xcerra Corporation.

Insider & Institutional Ownership

86.3% of Xcerra Corporation shares are owned by institutional investors. Comparatively, 96.1% of Photronics shares are owned by institutional investors. 2.6% of Xcerra Corporation shares are owned by insiders. Comparatively, 3.7% of Photronics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Xcerra Corporation and Photronics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcerra Corporation $355.08 million 1.49 $23.08 million $0.32 30.53
Photronics $437.08 million 1.25 $111.14 million $0.20 39.75

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

Profitability

This table compares Xcerra Corporation and Photronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcerra Corporation 4.86% 6.63% 4.96%
Photronics 2.97% 1.34% 1.12%

Volatility and Risk

Xcerra Corporation has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, Photronics has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Summary

Photronics beats Xcerra Corporation on 8 of the 14 factors compared between the two stocks.

Xcerra Corporation Company Profile

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

Photronics Company Profile

Photronics, Inc. is a manufacturer of photomasks, which are photographic quartz plates containing microscopic images of electronic circuits. As of October 30, 2016, the Company operated principally from nine manufacturing facilities: two located in Europe, three in Taiwan, one in Korea and three in the United States. Photomasks are used in the manufacture of semiconductors and flat panel displays (FPDs), and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits (ICs), and a range of FPDs and other types of electrical and optical components. The Company offers reticle and photomask maintenance, including pellicle replacement, mask cleaning and re-certification, at all its sites across the world. Its products include Mature Binary, Advanced Binary Reticles, Phase Shift Masks-Embedded Attenuated Phase Shift Masks (EAPSM), Other Advanced Products and Large Area Masks.

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