Finisar Corporation (NASDAQ: FNSR) and Harmonic (NASDAQ:HLIT) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Finisar Corporation 16.92% 13.11% 8.25%
Harmonic -21.58% -13.22% -6.31%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Finisar Corporation $1.45 billion 1.81 $274.41 million $2.13 10.81
Harmonic $379.77 million 0.63 -$18.46 million ($1.03) -2.84

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Finisar Corporation and Harmonic, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Finisar Corporation 0 1 10 3 3.14
Harmonic 0 2 2 0 2.50

Finisar Corporation presently has a consensus price target of $32.79, suggesting a potential upside of 42.37%. Harmonic has a consensus price target of $5.63, suggesting a potential upside of 92.31%. Given Harmonic’s higher possible upside, analysts plainly believe Harmonic is more favorable than Finisar Corporation.

Institutional and Insider Ownership

86.3% of Finisar Corporation shares are owned by institutional investors. Comparatively, 99.1% of Harmonic shares are owned by institutional investors. 1.0% of Finisar Corporation shares are owned by insiders. Comparatively, 4.3% of Harmonic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Finisar Corporation has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Harmonic has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Summary

Finisar Corporation beats Harmonic on 11 of the 14 factors compared between the two stocks.

Finisar Corporation Company Profile

Finisar Corporation (Finisar) is a provider of optical subsystems and components that are used in data communication and telecommunication applications. The Company’s optical subsystems consist of transmitters, receivers, transceivers, transponders and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in these networks, including the switches, routers, and servers used in wireline networks. These products rely on the use of semiconductor lasers and photodetectors in conjunction with integrated circuits and optoelectronic packaging to provide a means for transmitting and receiving digital signals over fiber optic cable at speeds ranging from less than one gigabit per second (Gbps), to more than 100 Gbps, over distances of less than 10 meters to more than 2,000 kilometers, using a range of network protocols and physical configurations.

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.

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