Critical Survey: nLIGHT (NASDAQ:LASR) and Netlist (NASDAQ:NLST)

nLIGHT (NASDAQ:LASRGet Rating) and Netlist (NASDAQ:NLSTGet Rating) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for nLIGHT and Netlist, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
nLIGHT 0 1 2 1 3.00
Netlist 0 0 0 0 N/A

nLIGHT presently has a consensus target price of $29.40, indicating a potential upside of 130.95%. Given nLIGHT’s higher probable upside, analysts clearly believe nLIGHT is more favorable than Netlist.

Valuation and Earnings

This table compares nLIGHT and Netlist’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
nLIGHT $270.15 million 2.10 -$29.67 million ($0.75) -16.97
Netlist $142.35 million 5.56 $4.83 million ($0.14) -24.43

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

Volatility and Risk

nLIGHT has a beta of 2.34, meaning that its stock price is 134% more volatile than the S&P 500. Comparatively, Netlist has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Profitability

This table compares nLIGHT and Netlist’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
nLIGHT -11.76% -9.81% -7.91%
Netlist -17.64% -58.67% -32.04%

Institutional & Insider Ownership

80.7% of nLIGHT shares are owned by institutional investors. Comparatively, 0.0% of Netlist shares are owned by institutional investors. 4.6% of nLIGHT shares are owned by insiders. Comparatively, 3.1% of Netlist shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

nLIGHT beats Netlist on 11 of the 14 factors compared between the two stocks.

About nLIGHT

(Get Rating)

nLIGHT, Inc. designs, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. It operates in two segments, Laser Products and Advanced Development. The company also provides fiber amplifiers, and 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 various independent sales representatives and distributors in Asia, Europe, 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 Netlist

(Get Rating)

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. It offers HybriDIMM, a storage class memory product, which unifies dynamic random-access memory (DRAM) and NAND flash in a plug-and-play module delivering terabyte storage capacities operating at nanosecond memory speeds. The company also provides nonvolatile (NV) memory products, such as NVvault DDR4 NVDIMM that provides data acceleration and protection in a joint electron device engineering council standard DDR4 interface; and specialty DIMMs and embedded flash products for use in data center and industrial applications. It resells component products, including solid state drive (SSDs), NAND flash, and DRAM products to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

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