Pixelworks (NASDAQ:PXLW) and NeoPhotonics (NYSE:NPTN) Head to Head Analysis

Pixelworks (NASDAQ:PXLWGet Rating) and NeoPhotonics (NYSE:NPTNGet Rating) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Pixelworks and NeoPhotonics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pixelworks 0 1 3 0 2.75
NeoPhotonics 0 6 2 0 2.25

Pixelworks presently has a consensus target price of $7.67, indicating a potential upside of 318.94%. NeoPhotonics has a consensus target price of $15.80, indicating a potential upside of 1.22%. Given Pixelworks’ stronger consensus rating and higher possible upside, equities analysts plainly believe Pixelworks is more favorable than NeoPhotonics.

Institutional & Insider Ownership

38.6% of Pixelworks shares are owned by institutional investors. Comparatively, 85.6% of NeoPhotonics shares are owned by institutional investors. 3.7% of Pixelworks shares are owned by company insiders. Comparatively, 4.1% of NeoPhotonics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Pixelworks -26.16% -23.80% -10.33%
NeoPhotonics -10.46% -14.23% -7.21%

Volatility & Risk

Pixelworks has a beta of 2.27, suggesting that its stock price is 127% more volatile than the S&P 500. Comparatively, NeoPhotonics has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pixelworks $55.10 million 1.79 -$19.41 million ($0.31) -5.90
NeoPhotonics $290.29 million 2.88 -$40.72 million ($0.64) -24.39

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

About Pixelworks (Get Rating)

Pixelworks, Inc. develops and markets semiconductor and software solutions. The company provides video display processor products comprises image processor ICs, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; video co-processor ICs that work with an image processor to post-process video signals to enhance the performance or feature set of the overall video solution; and transcoder ICs, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing for converting bitrates, resolutions, and codecs. As of December 31, 2021, it had an intellectual property portfolio of 335 patents related to the visual display of digital image data. The company's products are used in smartphones, tablets, and projectors. It serves in Japan, China, Taiwan, the United States, Europe, and Korea through a direct sales force, as well as distributors and manufacturers' representatives. The company was incorporated in 1997 and is based in Portland, Oregon.

About NeoPhotonics (Get Rating)

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks. It offers transmitter and receiver components, and coherent modules, as well as switching products for 400G and optical transmission applications over distances of approximately 2 to 2,000 kilometers; ultra-narrow linewidth tunable lasers; electro-absorptively modulated lasers; distributed feedback lasers; component lasers; and integrated coherent receivers and modulators. The company also provides pluggable coherent transceivers that combine ultra-narrow linewidth laser with coherent receiver and performance coherent modulator; and 100G products for data center applications. In addition, it offers multi-cast switching solutions for 100G and above coherent systems; and network products and solutions, such as arrayed waveguide gratings, multiplexers, and filters that are used in dense wavelength division multiplexing systems. NeoPhotonics Corporation sells its products to network equipment manufacturers through a direct sales force in North America; Europe; and Asia, including China, Japan, Korea, and Taiwan. The company was formerly known as NanoGram Corporation and changed its name to NeoPhotonics Corporation in 2002. NeoPhotonics Corporation was incorporated in 1996 and is headquartered in San Jose, California.

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