Harmonic (NASDAQ: HLIT) and Ixia (NASDAQ:XXIA) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitabiliy and institutional ownership.

Profitability

This table compares Harmonic and Ixia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harmonic -17.50% -7.29% -3.55%
Ixia -29.28% -28.71% -19.71%

Risk and Volatility

Harmonic has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Ixia has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Institutional & Insider Ownership

98.3% of Harmonic shares are held by institutional investors. Comparatively, 63.6% of Ixia shares are held by institutional investors. 4.3% of Harmonic shares are held by company insiders. Comparatively, 24.4% of Ixia shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Harmonic $407.02 million 1.05 -$1.02 million ($0.91) -5.82
Ixia N/A N/A N/A $0.12 163.76

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Harmonic and Ixia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harmonic 0 2 1 0 2.33
Ixia 0 3 1 0 2.25

Harmonic presently has a consensus price target of $5.67, indicating a potential upside of 6.92%. Ixia has a consensus price target of $19.65, indicating a potential upside of 0.00%. Given Harmonic’s stronger consensus rating and higher probable upside, analysts plainly believe Harmonic is more favorable than Ixia.

Summary

Harmonic beats Ixia on 8 of the 10 factors compared between the two stocks.

Harmonic Company Profile

Harmonic Inc. (Harmonic) designs, manufactures and sells video infrastructure products, and system solutions. The Company has two segments: Video and Cable Edge. Harmonic provides technical support and professional services to its customers around the world. The Video segment sells video processing and production, and playout solutions and services to broadcast and media companies, streaming media companies, cable operators, and satellite and telecommunications (telco), and pay television (TV) service providers. Its Cable Edge business sells cable edge solutions and related services to cable operators around the world. The Video segment offers a range of products and solutions, as well as software-based media processing platforms. The Company’s Narrowcast Services Gateway (NSG) products are integrated edge gateway products that integrate routing, multiplexing, scrambling and modulation into a single package for the delivery of narrowcast services to subscribers over cable networks.

Ixia Company Profile

Ixia is a provider of physical and virtual network application performance and security resilience solutions. The Company’s product solutions consist of its hardware platforms, software applications and services, including warranty and maintenance offerings. The Company helps its customers to validate the performance and security resilience of their applications and networks. The Company offers network test hardware platforms with interchangeable interfaces, using a common set of applications and Application Programing Interfaces (APIs). The Company provides its solutions to network equipment manufacturers (NEMs), service providers, and enterprise and government organizations. The Company’s product solutions consist of its hardware platforms, such as chassis, interface cards and appliances, software application tools, and services, including its warranty and maintenance offerings and professional services.

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