Cree (NASDAQ: CREE) and Netlist (NASDAQ:NLST) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Valuation and Earnings

This table compares Cree and Netlist’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cree $1.47 billion 2.27 $101.00 million ($1.22) -28.02
Netlist $28.96 million 1.58 -$12.35 million ($0.25) -2.60

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cree -8.42% -0.44% -0.37%
Netlist -53.57% N/A -77.78%

Volatility and Risk

Cree has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Netlist has a beta of -0.92, indicating that its stock price is 192% less volatile than the S&P 500.

Institutional and Insider Ownership

91.2% of Cree shares are held by institutional investors. Comparatively, 19.4% of Netlist shares are held by institutional investors. 1.1% of Cree shares are held by company insiders. Comparatively, 15.4% of Netlist shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Cree and Netlist, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cree 4 8 2 0 1.86
Netlist 0 0 3 0 3.00

Cree presently has a consensus target price of $26.21, suggesting a potential downside of 23.32%. Netlist has a consensus target price of $2.23, suggesting a potential upside of 243.08%. Given Netlist’s stronger consensus rating and higher probable upside, analysts clearly believe Netlist is more favorable than Cree.

Summary

Cree beats Netlist on 7 of the 13 factors compared between the two stocks.

Cree Company Profile

Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.

Netlist Company Profile

Netlist, Inc. designs, manufactures and sells a range of memory subsystems for datacenter, data storage and computing markets. The Company operates in the segment of design and manufacture of memory subsystems for the server, computing and communications markets. The Company’s memory subsystems consist of combinations of dynamic random access memory integrated circuits (DRAM ICs or DRAM), NAND flash memory (NAND flash), application-specific integrated circuits (ASICs) and other components assembled on printed circuit boards (PCBs). The Company primarily markets and sells its products to original equipment manufacturer (OEM) customers, hyper scale datacenter operators and data storage vendors. The Company’s products include NVvault, HyperCloud, and specialty memory modules and flash-based products. NVvault is a memory subsystem that incorporates both DRAM and NAND flash in a single persistent dual-in line memory module (DIMM) solution.

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