Head to Head Review: Netgear (NTGR) vs. DASAN Zhone Solutions (DZSI)

Netgear (NASDAQ: NTGR) and DASAN Zhone Solutions (NASDAQ:DZSI) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Insider and Institutional Ownership

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97.5% of Netgear shares are owned by institutional investors. Comparatively, 9.5% of DASAN Zhone Solutions shares are owned by institutional investors. 6.2% of Netgear shares are owned by insiders. Comparatively, 65.1% of DASAN Zhone Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Netgear and DASAN Zhone Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netgear $1.41 billion 1.28 $19.43 million $2.32 24.66
DASAN Zhone Solutions $247.11 million 0.76 $1.07 million $0.07 163.43

Netgear has higher revenue and earnings than DASAN Zhone Solutions. Netgear is trading at a lower price-to-earnings ratio than DASAN Zhone Solutions, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Netgear has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500. Comparatively, DASAN Zhone Solutions has a beta of 3.71, meaning that its stock price is 271% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Netgear and DASAN Zhone Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netgear 0 0 3 0 3.00
DASAN Zhone Solutions 0 0 0 0 N/A

Netgear currently has a consensus price target of $74.00, suggesting a potential upside of 29.37%. Given Netgear’s higher possible upside, equities research analysts plainly believe Netgear is more favorable than DASAN Zhone Solutions.

Profitability

This table compares Netgear and DASAN Zhone Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netgear 1.38% 9.92% 6.63%
DASAN Zhone Solutions 0.46% 1.70% 0.77%

Summary

Netgear beats DASAN Zhone Solutions on 10 of the 13 factors compared between the two stocks.

Netgear Company Profile

NETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. The company operates in three segments: Arlo, Connected Home, and Small and Medium Business. It offers smart home/connected home/broadband access products, such as remote video security systems, broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, and WiFi network adapters. The company also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. It markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California.

DASAN Zhone Solutions Company Profile

DASAN Zhone Solutions, Inc., formerly Zhone Technologies, Inc., designs, develops and manufactures communications network equipment for telecommunications operators and enterprises across the world. The Company’s products provide enterprise solutions that enable both network service providers and enterprises to deliver high speed fiber access, while transporting voice, video and data to the end user. In addition to its product offerings in its core business, it offers FiberLAN Passive Optical local area network (LAN), which provides an alternative to switched copper-based LANs. The customers of its FiberLAN business include hospitality, government, education, manufacturing and business enterprises. Its products span two categories: SLMS Products, and Legacy, Service and Other Products. Its SLMS Products include Broadband Aggregation and Service, Customer Premise Equipment (CPE), Zhone Management System and FiberLAN Passive Optical LAN.

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