Smart Global (NASDAQ:SGH) and Finisar (NASDAQ:FNSR) Head to Head Comparison

Finisar (NASDAQ:FNSR) and Smart Global (NASDAQ:SGH) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Valuation & Earnings

This table compares Finisar and Smart Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Finisar $1.28 billion 2.23 -$53.22 million $0.59 40.29
Smart Global $1.21 billion 0.58 $51.33 million $2.56 11.54

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

Profitability

This table compares Finisar and Smart Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Finisar -3.48% 4.62% 3.07%
Smart Global 4.24% 25.15% 8.57%

Risk & Volatility

Finisar has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Smart Global has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Finisar and Smart Global, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Finisar 0 5 0 0 2.00
Smart Global 0 0 5 0 3.00

Finisar presently has a consensus target price of $22.67, suggesting a potential downside of 4.64%. Smart Global has a consensus target price of $37.00, suggesting a potential upside of 25.25%. Given Smart Global’s stronger consensus rating and higher possible upside, analysts clearly believe Smart Global is more favorable than Finisar.

Institutional and Insider Ownership

99.7% of Finisar shares are owned by institutional investors. Comparatively, 93.7% of Smart Global shares are owned by institutional investors. 1.1% of Finisar shares are owned by insiders. Comparatively, 4.2% of Smart Global shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Smart Global beats Finisar on 9 of the 14 factors compared between the two stocks.

Finisar Company Profile

Finisar Corporation provides components and subsystems to networking equipment manufacturers, data center operators, telecom service providers, consumer electronics, and automotive companies in the United States, China, Malaysia, and internationally. The company's optical subsystems primarily include transmitters, receivers, transceivers, transponders, and active optical cables, which provide the fundamental optical-electrical or optoelectronic interface for interconnecting the electronic equipment used in wireline networks comprising switches, routers, and servers, as well as wireless networks, such as antennas and base stations. It also offers wavelength selective switches that are used to switch network traffic from one optical fiber to various other fibers without converting to an electronic signal. In addition, the company provides packaged laser, receivers, and photodetectors for data communication and telecommunication applications; and passive optical components for telecommunication applications. It markets its products through direct sales force, as well as distributors, manufacturers' representatives and resellers, and system integrators; and to the manufacturers of storage systems and telecommunication equipment, as well as to their contract manufacturers. Finisar Corporation was founded in 1987 and is headquartered in Sunnyvale, California.

Smart Global Company Profile

SMART Global Holdings, Inc. designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements. It also provides flash memory, USB, and serial advanced technology attachment products primarily for use in communications equipment, printers, servers and storage products, switches, and routers; and aerospace, automotive, and defense industries, as well as industrial applications. In addition, the company provides networking, storage, and compute solutions, as well as HPC software to manage and use on premise and cloud computing clusters. Further, it offers supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. SMART Global Holdings, Inc. sells its products to OEMs through direct sales force and independent sales representatives in North America, Latin America, Asia, and Europe. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

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