Financial Analysis: Lantronix (LTRX) and Comtech Telecommunications Corp. (CMTL)
Comtech Telecommunications Corp. (NASDAQ: CMTL) and Lantronix (NASDAQ:LTRX) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.
Institutional and Insider Ownership
88.1% of Comtech Telecommunications Corp. shares are held by institutional investors. Comparatively, 17.5% of Lantronix shares are held by institutional investors. 6.4% of Comtech Telecommunications Corp. shares are held by company insiders. Comparatively, 52.4% of Lantronix shares are held 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 and Valuation
This table compares Comtech Telecommunications Corp. and Lantronix’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Comtech Telecommunications Corp.||$550.37 million||0.93||$62.20 million||$0.67||32.31|
Comtech Telecommunications Corp. has higher revenue and earnings than Lantronix. Lantronix is trading at a lower price-to-earnings ratio than Comtech Telecommunications Corp., indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Comtech Telecommunications Corp. and Lantronix, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Comtech Telecommunications Corp.||0||2||3||0||2.60|
Comtech Telecommunications Corp. presently has a consensus target price of $18.38, indicating a potential downside of 15.13%. Lantronix has a consensus target price of $4.00, indicating a potential upside of 86.92%. Given Lantronix’s stronger consensus rating and higher possible upside, analysts clearly believe Lantronix is more favorable than Comtech Telecommunications Corp..
Volatility and Risk
Comtech Telecommunications Corp. has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500. Comparatively, Lantronix has a beta of -0.11, meaning that its stock price is 111% less volatile than the S&P 500.
This table compares Comtech Telecommunications Corp. and Lantronix’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Comtech Telecommunications Corp.||2.88%||1.70%||0.92%|
Comtech Telecommunications Corp. pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. Lantronix does not pay a dividend. Comtech Telecommunications Corp. pays out 59.7% of its earnings in the form of a dividend.
Comtech Telecommunications Corp. beats Lantronix on 9 of the 15 factors compared between the two stocks.
About Comtech Telecommunications Corp.
Comtech Telecommunications Corp. designs, develops, produces and markets products, systems and services for communications solutions. The Company operates through two segments: Commercial Solutions and Government Solutions. It offers communications solutions, including command and control technologies, safety and security technologies and enterprise technologies. Its Commercial Solutions segment provides satellite communications (such as satellite earth station modems and traveling wave tube amplifiers), public safety systems (such as next generation 911 technologies) and enterprise application technologies (such as messaging and trusted location-based technologies). The Government Solutions segment includes command and control technologies, troposcatter technologies, and radio frequency power and switching technologies. It serves system and network suppliers in the global satellite, defense, broadcast and aerospace industries, and the United States federal government, among others.
Lantronix, Inc. is a provider of secure data access and management solutions for Internet of things (IoT) and information technology (IT) assets. The Company organizes its products and solutions into three product lines, including IoT, IT Management and Other. Its IoT products consist of IoT Gateways and IoT Building Blocks. The Company’s IT Management product line includes console management, power management and keyboard video mouse (KVM), products that provide remote out-of-band management (OOBM) access to IT and networking infrastructure deployed in test labs, data centers and server rooms. Its Other product line includes non-focus products, such as the xPrintServer, xSenso and WiBox. Its connectivity solutions serves a range of industries, including data center, medical, security, environmental and government. The Company conducts its business in approximately three geographic regions, including the Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific Japan (APJ).
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