Financial Analysis: Acacia Communications (NASDAQ:ACIA) versus Its Competitors

Acacia Communications (NASDAQ: ACIA) is one of 64 publicly-traded companies in the “Communications & Networking” industry, but how does it compare to its rivals? We will compare Acacia Communications to related companies based on the strength of its valuation, risk, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Valuation & Earnings

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

Gross Revenue NetIncome Price/Earnings Ratio
Acacia Communications $478.41 million $131.57 million 12.69
Acacia Communications Competitors $3.30 billion $346.31 million -103.02

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 0 1 9 0 2.90
Acacia Communications Competitors 377 2416 4002 159 2.57

Acacia Communications currently has a consensus target price of $50.50, suggesting a potential upside of 34.49%. As a group, “Communications & Networking” companies have a potential upside of 12.08%. Given Acacia Communications’ stronger consensus rating and higher possible upside, analysts clearly believe Acacia Communications is more favorable than its rivals.

Insider and Institutional Ownership

84.5% of Acacia Communications shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Communications & Networking” companies are owned by institutional investors. 37.1% of Acacia Communications shares are owned by insiders. Comparatively, 12.2% of shares of all “Communications & Networking” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

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 27.98% 25.29% 21.83%
Acacia Communications Competitors -2.06% -8.60% -0.19%

Summary

Acacia Communications beats its rivals on 9 of the 12 factors compared.

About Acacia Communications

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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