Head-To-Head Contrast: Alpha and Omega Semiconductor Limited (AOSL) and NeoPhotonics Corporation (NPTN)

Alpha and Omega Semiconductor Limited (NASDAQ: AOSL) and NeoPhotonics Corporation (NYSE:NPTN) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Alpha and Omega Semiconductor Limited and NeoPhotonics Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alpha and Omega Semiconductor Limited 0 1 3 0 2.75
NeoPhotonics Corporation 0 3 5 1 2.78

Alpha and Omega Semiconductor Limited currently has a consensus target price of $25.00, indicating a potential upside of 39.12%. NeoPhotonics Corporation has a consensus target price of $8.89, indicating a potential upside of 22.27%. Given Alpha and Omega Semiconductor Limited’s higher possible upside, research analysts clearly believe Alpha and Omega Semiconductor Limited is more favorable than NeoPhotonics Corporation.

Insider & Institutional Ownership

70.8% of Alpha and Omega Semiconductor Limited shares are owned by institutional investors. Comparatively, 82.3% of NeoPhotonics Corporation shares are owned by institutional investors. 21.7% of Alpha and Omega Semiconductor Limited shares are owned by company insiders. Comparatively, 17.3% of NeoPhotonics Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Alpha and Omega Semiconductor Limited and NeoPhotonics Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Alpha and Omega Semiconductor Limited $383.34 million 1.13 $13.82 million $0.61 29.46
NeoPhotonics Corporation $411.42 million 0.78 -$200,000.00 ($0.87) -8.36

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

Profitability

This table compares Alpha and Omega Semiconductor Limited and NeoPhotonics Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alpha and Omega Semiconductor Limited 3.92% 4.85% 3.78%
NeoPhotonics Corporation -11.37% -13.61% -7.46%

Risk and Volatility

Alpha and Omega Semiconductor Limited has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500. Comparatively, NeoPhotonics Corporation has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

Alpha and Omega Semiconductor Limited beats NeoPhotonics Corporation on 8 of the 14 factors compared between the two stocks.

About Alpha and Omega Semiconductor Limited

Alpha and Omega Semiconductor Limited is a designer, developer and global supplier of power semiconductors. The Company’s portfolio of power semiconductors includes approximately 1,600 products, as of June 30, 2016. The Company’s product portfolio consists of two categories: power discretes and power integrated circuits (ICs). The Company’s portfolio of products focuses high-volume applications, including personal computers, flat panel televisions, light-emitting diode (LED) lighting, smart phones, battery packs, consumer and industrial motor controls and power supplies for television, computers, servers and telecommunications equipment. The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. The Company conducts its operations primarily in the United States, Hong Kong, China, Taiwan, Korea and Japan. Its products are applicable in desktop and tablet personal computers, flat panel displays and televisions.

About NeoPhotonics Corporation

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.

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