Contrasting FormFactor (NASDAQ:FORM) and POET Technologies (NASDAQ:POET)

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

Volatility and Risk

POET Technologies has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Valuation & Earnings

This table compares POET Technologies and FormFactor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$40,000.00	24,542.16	-$56.70 million	($0.72)	-10.35
FormFactor	$763.60 million	6.37	$69.61 million	$0.52	120.62

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

Profitability

This table compares POET Technologies and FormFactor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	-6,625.16%	-103.46%	-52.64%
FormFactor	5.38%	5.10%	4.26%

Insider & Institutional Ownership

2.0% of POET Technologies shares are held by institutional investors. Comparatively, 98.8% of FormFactor shares are held by institutional investors. 0.5% of POET Technologies shares are held by insiders. Comparatively, 0.9% of FormFactor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for POET Technologies and FormFactor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	1	0	0	0	1.00
FormFactor	0	7	4	0	2.36

POET Technologies presently has a consensus target price of $8.00, indicating a potential upside of 7.38%. FormFactor has a consensus target price of $57.00, indicating a potential downside of 9.12%. Given POET Technologies’ higher possible upside, analysts clearly believe POET Technologies is more favorable than FormFactor.

Summary

FormFactor beats POET Technologies on 12 of the 14 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions in the United States, Taiwan, South Korea, China, Europe, Japan, Malaysia, Singapore, and internationally. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices, as well as computer processor devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probe systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. It markets and sells its products through direct sales force, manufacturers' representatives, and distributors. The company was incorporated in 1993 and is headquartered in Livermore, California.