Comparing Applied Optoelectronics (NASDAQ:AAOI) & Taiwan Semiconductor Manufacturing (NYSE:TSM)

Applied Optoelectronics (NASDAQ:AAOIGet Rating) and Taiwan Semiconductor Manufacturing (NYSE:TSMGet Rating) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares Applied Optoelectronics and Taiwan Semiconductor Manufacturing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics -25.60% -11.62% -6.69%
Taiwan Semiconductor Manufacturing 38.44% 31.70% 19.44%

Institutional & Insider Ownership

47.6% of Applied Optoelectronics shares are held by institutional investors. 6.9% of Applied Optoelectronics shares are held by company insiders. Comparatively, 1.1% of Taiwan Semiconductor Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Applied Optoelectronics and Taiwan Semiconductor Manufacturing’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $211.57 million 0.33 -$54.16 million ($2.02) -1.27
Taiwan Semiconductor Manufacturing $56.82 billion 8.48 $21.35 billion $4.56 20.38

Taiwan Semiconductor Manufacturing has higher revenue and earnings than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than Taiwan Semiconductor Manufacturing, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Applied Optoelectronics has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500. Comparatively, Taiwan Semiconductor Manufacturing has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Applied Optoelectronics and Taiwan Semiconductor Manufacturing, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 1 2 0 0 1.67
Taiwan Semiconductor Manufacturing 0 3 5 0 2.63

Applied Optoelectronics presently has a consensus target price of $4.40, suggesting a potential upside of 71.21%. Taiwan Semiconductor Manufacturing has a consensus target price of $139.29, suggesting a potential upside of 49.88%. Given Applied Optoelectronics’ higher probable upside, analysts plainly believe Applied Optoelectronics is more favorable than Taiwan Semiconductor Manufacturing.

Summary

Taiwan Semiconductor Manufacturing beats Applied Optoelectronics on 9 of the 13 factors compared between the two stocks.

About Applied Optoelectronics (Get Rating)

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, subassemblies, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to internet data center operators, cable television and telecom equipment manufacturers, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

About Taiwan Semiconductor Manufacturing (Get Rating)

Taiwan Semiconductor Manufacturing Company Limited manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides complementary metal oxide silicon wafer fabrication processes to manufacture logic, mixed-signal, radio frequency, and embedded memory semiconductors. The company also offers customer support, account management, and engineering services, as well as manufactures masks. Its products are used in mobile devices, high performance computing, automotive electronics, and internet of things markets. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

Receive News & Ratings for Applied Optoelectronics Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Applied Optoelectronics and related companies with MarketBeat.com's FREE daily email newsletter.