Polar Power (NASDAQ: POLA) and FARO Technologies (NASDAQ:FARO) are both large-cap electrical components & equipment – nec companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Polar Power and FARO Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Polar Power 0 0 1 0 3.00
FARO Technologies 0 2 4 0 2.67

FARO Technologies has a consensus target price of $48.80, suggesting a potential downside of 4.13%. Given Polar Power’s stronger consensus rating and higher probable upside, equities analysts clearly believe Polar Power is more favorable than FARO Technologies.

Valuation & Earnings

This table compares Polar Power and FARO Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Polar Power $22.80 million 2.30 $4.40 million $0.39 13.26
FARO Technologies $325.58 million 2.61 $11.10 million $0.00 -5,090,000.00

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

Profitability

This table compares Polar Power and FARO Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Polar Power N/A 19.35% 16.54%
FARO Technologies 0.03% 0.03% 0.02%

Insider and Institutional Ownership

8.7% of Polar Power shares are held by institutional investors. Comparatively, 94.7% of FARO Technologies shares are held by institutional investors. 2.4% of FARO Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

FARO Technologies beats Polar Power on 7 of the 12 factors compared between the two stocks.

Polar Power Company Profile

Polar Power, Inc. is engaged in designing, manufacturing and selling direct current (DC) power systems for applications primarily in the telecommunications, military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply markets. Within the telecommunications market, the Company’s DC power systems provide DC power to service applications that do not have access to the utility grid (such as off-grid applications) or have critical power needs and cannot be without power in the event of utility grid failure (such as back-up power applications). Its product offerings include DC base power systems, DC hybrid power systems and DC solar hybrid power systems. The Company’s technologies include Permanent Magnet Homopolar Hybrid (PMHH) Technology and Supra Controller Technology. Its power and control system architecture is controlled by its digital control system, Supra Controller, which contains software configured to meet specific application needs.

FARO Technologies Company Profile

FARO Technologies, Inc. designs, develops, manufactures, markets and supports software driven, three-dimensional (3D) measurement, imaging and realization systems. The Company operates in three segments: Factory Metrology, Construction BIM-CIM and Other. It sells its products through a direct sales force across customers in a range of manufacturing, industrial, architecture, surveying, building construction and law enforcement applications. Its FaroArm, FARO Laser ScanArm, FARO Gage, FARO Laser Tracker, FARO Cobalt Array 3D Imager AMP, and their companion CAM2 software provide for Computer-Aided Design-based inspection and/or factory-level statistical process control and surveying. It operates in international markets throughout the world and maintain sales offices in Australia, Brazil, Canada, China, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Portugal, Singapore, South Korea, Spain, Switzerland, Thailand, Turkey, the United Kingdom, the United States and Vietnam.

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