Ceragon Networks (NASDAQ: CRNT) and Aviat Networks (NASDAQ:AVNW) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider & Institutional Ownership

21.7% of Ceragon Networks shares are held by institutional investors. Comparatively, 47.9% of Aviat Networks shares are held by institutional investors. 19.0% of Ceragon Networks shares are held by insiders. Comparatively, 6.7% of Aviat Networks shares are held by 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.

Profitability

This table compares Ceragon Networks and Aviat Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ceragon Networks 3.79% 10.27% 4.77%
Aviat Networks -5.95% -13.23% -4.55%

Valuation and Earnings

This table compares Ceragon Networks and Aviat Networks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ceragon Networks $309.83 million 0.63 $28.37 million $0.14 17.86
Aviat Networks $243.70 million 0.42 -$5.71 million ($2.77) -7.03

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

Volatility and Risk

Ceragon Networks has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Aviat Networks has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Ceragon Networks and Aviat Networks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ceragon Networks 0 3 0 0 2.00
Aviat Networks 0 0 0 0 N/A

Ceragon Networks currently has a consensus price target of $3.00, suggesting a potential upside of 20.00%. Given Ceragon Networks’ higher possible upside, research analysts plainly believe Ceragon Networks is more favorable than Aviat Networks.

Summary

Ceragon Networks beats Aviat Networks on 10 of the 11 factors compared between the two stocks.

Ceragon Networks Company Profile

Ceragon Networks Ltd. offers wireless backhaul solutions. The Company’s products include FibeAir IP-20 Platform, FibeAir IP-20 Assured Platform and Network Management. The Company provides its services to wireless service providers, public safety organizations, government agencies and utility companies, among others. Its solutions are deployed by over 460 service providers, as well as a range of private network owners, in over 130 countries. The Company’s FibeAir IP-20 platform offers flexibility in choosing all-outdoor, split-mount and all-indoor configurations to suit any deployment scenario. The FibeAir IP-20 platform includes product categories, such as shorthaul-access and shorthaul-aggregation. The FibeAir IP-20 Assured platform includes product categories, such as shorthaul-access, shorthaul-aggregation, small cells, longhaul and enterprise access. Its NetMaster is a Network Management System (NMS), which is designed for managing large-scale wireless backhaul networks.

Aviat Networks Company Profile

Aviat Networks, Inc., together with its subsidiaries, is a supplier of microwave networking solutions. The Company’s product categories include point-to-point microwave and millimeter wave radios that are licensed (subject to local frequency regulatory requirements), lightly-licensed and license-exempt (operating in license-exempt frequencies), and element and network management software. In addition, it provides a range of professional services enabling it to deliver turnkey networks, including design, deployment, maintenance and managed services. It designs, manufactures and sells a range of wireless networking products, solutions and services to mobile and fixed public network operators, private network operators, Federal, State and Local government agencies, transportation, energy and utility companies, public safety agencies and broadcast network operators around the world. The Company sells products and services directly to its customers and also use agents and resellers.

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