Comparing Netlist (OTCMKTS:NLST) & SMART Global (NASDAQ:SGH)

SMART Global (NASDAQ:SGH) and Netlist (OTCMKTS:NLST) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares SMART Global and Netlist’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SMART Global	-14.35%	8.86%	2.01%
Netlist	-37.19%	-480.98%	-84.56%

Institutional & Insider Ownership

0.0% of Netlist shares are owned by institutional investors. 2.4% of SMART Global shares are owned by insiders. Comparatively, 2.7% of Netlist shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares SMART Global and Netlist”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SMART Global	$1.44 billion	0.00	-$187.53 million	($3.08)	N/A
Netlist	$69.21 million	4.99	-$60.40 million	($0.22)	-5.77

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

Volatility & Risk

SMART Global has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500. Comparatively, Netlist has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SMART Global and Netlist, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SMART Global	0	0	4	0	3.00
Netlist	0	0	1	0	3.00

SMART Global currently has a consensus target price of $32.25, indicating a potential upside of 0.00%. Netlist has a consensus target price of $2.00, indicating a potential upside of 57.48%. Given Netlist’s higher probable upside, analysts plainly believe Netlist is more favorable than SMART Global.

About SMART Global

SMART Global Holdings, Inc., a memory-focused company, engages in the designing and development of enterprise solutions in the United States, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platform Solutions, and LED Solutions segments. The company offers dynamic random access memory modules, solid-state and flash storage, and other advanced memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. It also provides Penguin Computing that focus on technical computing for core and cloud environments through HPC and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications including high-performance products for government, health care, industrial, and telecommunications applications. In addition, the company offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and leading-edge solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, it provides LED-based products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brand. The company sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Milpitas, California.

About Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.