Mellanox Technologies (NASDAQ: MLNX) and QuickLogic (NASDAQ:QUIK) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility & Risk

Mellanox Technologies has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, QuickLogic has a beta of -0.16, suggesting that its share price is 116% less volatile than the S&P 500.

Profitability

This table compares Mellanox Technologies and QuickLogic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mellanox Technologies -0.92% 4.76% 3.24%
QuickLogic -120.37% -76.28% -49.70%

Insider and Institutional Ownership

60.8% of Mellanox Technologies shares are owned by institutional investors. Comparatively, 19.0% of QuickLogic shares are owned by institutional investors. 6.1% of Mellanox Technologies shares are owned by insiders. Comparatively, 5.9% of QuickLogic shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Mellanox Technologies and QuickLogic’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mellanox Technologies $857.50 million 3.53 $18.51 million ($0.16) -370.94
QuickLogic $11.42 million 10.60 -$19.14 million ($0.19) -7.95

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Mellanox Technologies and QuickLogic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mellanox Technologies 1 7 4 0 2.25
QuickLogic 0 0 2 0 3.00

Mellanox Technologies currently has a consensus price target of $52.50, indicating a potential downside of 11.54%. QuickLogic has a consensus price target of $2.25, indicating a potential upside of 49.01%. Given QuickLogic’s stronger consensus rating and higher probable upside, analysts plainly believe QuickLogic is more favorable than Mellanox Technologies.

Summary

Mellanox Technologies beats QuickLogic on 10 of the 13 factors compared between the two stocks.

About Mellanox Technologies

Mellanox Technologies, Ltd. is a fabless semiconductor company. The Company is an integrated supplier of interconnect products and solutions based on the InfiniBand and Ethernet standards. The Company operates in the development, manufacturing, marketing and sales of interconnect products segment. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment and other embedded systems. It operates its business globally and offers products to customers at various levels of integration. The products it offers include integrated circuits (ICs), adapter cards, switch systems, multi-core and network processors, cables, modules, software, services and accessories. Together these products form a networking solution, focused on computing, storage and communication applications used in multiple markets, including high-performance computing (HPC), cloud, Web 2.0, storage, financial services, and enterprise data center (EDC).

About QuickLogic

QuickLogic Corporation develops and markets semiconductor and software algorithm solutions. The Company’s solutions primarily target smartphones, wearable devices, tablets, and the Internet-of-Things (IoT). The Company is a fabless semiconductor provider of flexible sensor processing solutions, ultra-low power display bridges, and ultra-low power Field Programmable Gate Arrays (FPGAs). The Company’s solutions integrate multi-core processing, programmable logic, sensor fusion and context aware algorithms, and embedded software. The Company’s solutions are created from its new silicon platforms, including EOS, ArcticLink III, PolarPro 3, PolarPro II, PolarPro, and Eclipse II products, its mature products, which are produced on semiconductor processes over 180 nanometers, primarily include its pASIC 3 and QuickRAM, as well as royalty revenue, programming hardware and design software. Its sensor algorithm software includes SenseMe software library.

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