Clearfield (NASDAQ: CLFD) and Aerohive Networks (NYSE:HIVE) are both small-cap communications & networking – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Profitability

This table compares Clearfield and Aerohive Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Clearfield 5.20% 5.95% 5.50%
Aerohive Networks -17.00% -103.45% -18.90%

Analyst Ratings

This is a summary of recent ratings for Clearfield and Aerohive Networks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clearfield 0 0 2 0 3.00
Aerohive Networks 0 1 4 0 2.80

Clearfield presently has a consensus price target of $15.50, suggesting a potential upside of 26.53%. Aerohive Networks has a consensus price target of $6.31, suggesting a potential upside of 8.61%. Given Clearfield’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Clearfield is more favorable than Aerohive Networks.

Volatility and Risk

Clearfield has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Aerohive Networks has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.

Earnings and Valuation

This table compares Clearfield and Aerohive Networks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Clearfield $73.95 million 2.29 $3.84 million $0.28 43.75
Aerohive Networks $169.82 million 1.83 -$36.91 million ($0.51) -11.39

Clearfield has higher earnings, but lower revenue than Aerohive Networks. Aerohive Networks is trading at a lower price-to-earnings ratio than Clearfield, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

29.0% of Clearfield shares are held by institutional investors. Comparatively, 46.1% of Aerohive Networks shares are held by institutional investors. 18.3% of Clearfield shares are held by insiders. Comparatively, 26.2% of Aerohive Networks shares are held by 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

Clearfield beats Aerohive Networks on 9 of the 14 factors compared between the two stocks.

About Clearfield

Clearfield, Inc. manufactures, markets and sells fiber management and enclosure platform that consolidates, distributes and protects fiber as it moves from the inside plant to the outside plant and all the way to the home, business and cell site. The Company’s products include Clearview Cassette, which is the building block of its product platform; Connectivity and Optical Components; FieldSmart, which is a series of panels, cabinets, wall boxes and other enclosures that house the Clearview components; FieldShield, which is a fiber delivery method for broadband deployment; CraftSmart, which is a line of optical protection field enclosures, and Cable Assemblies. Its products are sold across broadband service providers, including traditional telephone companies, competitive local exchange carriers, multiple service operators (cable television), wireless service providers, and municipal-owned utilities that utilize fiber in their service offerings to businesses and consumers.

About Aerohive Networks

Aerohive Networks, Inc. together with its subsidiaries, has designed and developed a cloud-managed mobile networking platform that enables enterprises to deploy and manage a mobile-centric network edge. Its portfolio of products and solutions is built around sets of technologies and solutions, which include Enterprise Cloud Networking, Wireless Fidelity (Wi-Fi) Connectivity and Application and Insights. It conducts its business in geographic regions, including Americas; Europe, the Middle East and Africa, and Asia Pacific. Its product portfolio includes hardware products, cloud-based network management and applications, and support services. Its hardware products include access points, branch routers and access switches. Its hardware products are developed by its hardware design team working in conjunction with original design manufacturer partners, and leverage the commercially available Wi-Fi radios, network processors, crypto accelerators and switching chips.

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