PLX Technology (PLXT) versus NeoPhotonics (NPTN) Critical Review

PLX Technology (NASDAQ: PLXT) and NeoPhotonics (NYSE:NPTN) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Earnings & Valuation

This table compares PLX Technology and NeoPhotonics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PLX Technology N/A N/A N/A $0.10 N/A
NeoPhotonics $411.42 million 0.68 -$200,000.00 ($0.85) -7.54

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

Profitability

This table compares PLX Technology and NeoPhotonics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PLX Technology N/A N/A N/A
NeoPhotonics -11.37% -13.61% -7.46%

Institutional & Insider Ownership

81.1% of NeoPhotonics shares are held by institutional investors. 17.3% of NeoPhotonics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for PLX Technology and NeoPhotonics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PLX Technology 0 0 0 0 N/A
NeoPhotonics 0 3 5 1 2.78

NeoPhotonics has a consensus target price of $8.67, indicating a potential upside of 35.21%.

Summary

NeoPhotonics beats PLX Technology on 5 of the 9 factors compared between the two stocks.

About PLX Technology

PLX Technology, Inc. (PLX) is engaged in designing, developing, manufacturing, and selling integrated circuits that perform critical system connectivity functions. The Company markets its products to customers that sell electronic systems in the enterprise, consumer, server, storage, communications, personal computer (PC) peripheral and embedded markets. PLX also provides a range of connectivity bridges that allow systems that conform to different standards communicate with each other, and to enable customer field-programmable gate arrays (FPGAs) and application-specific integrated circuits (ASICs) with non-standard interfaces to connect up to the mainstream interconnects. PLX offers a solution consisting of semiconductor devices, software development kits, hardware design kits, software drivers and firmware solutions. In July 2012, Entropic Communications Inc. acquired specific direct broadcast satellite intellectual property and corresponding technologies from the Company.

About NeoPhotonics

NeoPhotonics Corporation develops, manufactures and markets optoelectronic products that transmit, receive and switch digital optical signals for communications networks. The Company develops and manufactures Transmitter Products, Receiver Products and Switch Products that are used in ultra-high speed digital optical communications, high speed switching and provisioning, and access connections for wireless and fiber-to-the-home communications networks. The Company’s products are categorized into groups, including High Speed Products and Network Products and Solutions. The High Speed Products includes products designed for 100G and beyond for telecommunication and datacenter or content provider networks and applications. Its Network Products and Solutions consist of various products designed for applications below 100G, and include 40G products. The Company combines its transmitter and receiver products into Transceiver modules.

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