Head to Head Analysis: Applied Optoelectronics (AAOI) and Aquantia (AQ)

Applied Optoelectronics (NASDAQ:AAOI) and Aquantia (NYSE:AQ) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Applied Optoelectronics and Aquantia’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $382.33 million 0.99 $73.95 million $4.23 4.52
Aquantia $103.37 million 2.98 -$5.41 million ($0.48) -18.42

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

Profitability

This table compares Applied Optoelectronics and Aquantia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics 4.20% 8.73% 6.28%
Aquantia -4.45% -6.14% -5.10%

Insider & Institutional Ownership

68.6% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 48.2% of Aquantia shares are held by institutional investors. 6.9% of Applied Optoelectronics shares are held by insiders. Comparatively, 24.1% of Aquantia 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.

Analyst Ratings

This is a breakdown of current recommendations for Applied Optoelectronics and Aquantia, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 4 2 4 0 2.00
Aquantia 0 0 5 0 3.00

Applied Optoelectronics presently has a consensus target price of $25.11, indicating a potential upside of 31.20%. Aquantia has a consensus target price of $15.83, indicating a potential upside of 79.11%. Given Aquantia’s stronger consensus rating and higher probable upside, analysts clearly believe Aquantia is more favorable than Applied Optoelectronics.

Summary

Applied Optoelectronics beats Aquantia on 8 of the 13 factors compared between the two stocks.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to Internet data center operators, cable television and telecommunications equipment manufacturers, and Internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was founded in 1997 and is headquartered in Sugar Land, Texas.

Aquantia Company Profile

Aquantia Corp., together with its subsidiaries, designs, develops, and markets advanced high-speed communication integrated circuits for Ethernet connectivity in the data center, enterprise infrastructure, and access markets worldwide. Its products include corporate and cloud data center products; enterprise infrastructure products; and access products, such as client connectivity and carrier access. The company sells its products to integrated circuit suppliers, original equipment manufacturers, and original design manufacturers through direct sales. Aquantia Corp. was founded in 2004 and is headquartered in San Jose, California.

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