Analyzing nLIGHT (NASDAQ:LASR) & Sigma Designs (OTCMKTS:SIGM)

Sigma Designs (OTCMKTS:SIGM) and nLIGHT (NASDAQ:LASR) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Insider and Institutional Ownership

83.9% of nLIGHT shares are owned by institutional investors. 4.5% of Sigma Designs shares are owned by insiders. Comparatively, 5.6% of nLIGHT shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Sigma Designs and nLIGHT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sigma Designs	0	0	0	0	N/A
nLIGHT	0	1	2	0	2.67

nLIGHT has a consensus target price of $16.00, indicating a potential upside of 19.76%. Given nLIGHT’s higher probable upside, analysts plainly believe nLIGHT is more favorable than Sigma Designs.

Profitability

This table compares Sigma Designs and nLIGHT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sigma Designs	N/A	N/A	N/A
nLIGHT	-23.81%	-17.60%	-14.56%

Earnings and Valuation

This table compares Sigma Designs and nLIGHT’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sigma Designs	$65.90 million	N/A	-$120.04 million	N/A	N/A
nLIGHT	$200.36 million	3.17	-$41.67 million	($1.02)	-13.10

nLIGHT has higher revenue and earnings than Sigma Designs.

Risk & Volatility

Sigma Designs has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, nLIGHT has a beta of 2.42, indicating that its share price is 142% more volatile than the S&P 500.

Summary

nLIGHT beats Sigma Designs on 7 of the 10 factors compared between the two stocks.

About Sigma Designs

Sigma Designs, Inc., an integrated system-on-chip solutions provider, provides intelligent platforms for use in the home entertainment, and home and industrial control appliances. The company offers mobile Internet of Things solutions used primarily for tracking applications, such as small tags that can be attached to track pets, keys, children, luggage, and vehicles. It also offers legacy products; and software development kits and engineering support services for hardware and software. The company markets and sells its products through direct sales force, manufacturer representatives, distributors, and resellers to end-product manufacturers, original equipment manufacturers, and original design manufacturers in Asia, North America, Europe, and internationally. Sigma Designs, Inc. was founded in 1982 and is headquartered in Fremont, California.

About nLIGHT

nLIGHT, Inc. designs, develops, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. The company operates in two segments, Laser Products and Advanced Development. It offers semiconductor lasers with various ranges of power levels, wavelengths, and output fiber sizes; and programmable and serviceable fiber lasers for use in industrial and aerospace and defense applications. The company also provides laser sensors, including light detection and ranging technologies for intelligence, surveillance, and reconnaissance applications; and fiber amplifiers, beam combination, and control systems for use in high-energy laser systems in directed energy applications. It sells its products through direct sales force in the United States, China, South Korea, and European countries, as well as through independent sales representatives and distributors in Asia, Australia, Europe, the Middle East, and South America. The company was formerly known as nLight Photonics Corporation and changed its name to nLIGHT, Inc. in January 2016. nLIGHT, Inc. was incorporated in 2000 and is headquartered in Camas, Washington.