Applied Optoelectronics (NASDAQ:AAOI) versus SunPower (NASDAQ:SPWR) Financial Analysis

Applied Optoelectronics (NASDAQ:AAOIGet Rating) and SunPower (NASDAQ:SPWRGet Rating) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Valuation and Earnings

This table compares Applied Optoelectronics and SunPower’s gross 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 0.30 -$54.16 million ($2.01) -1.14
SunPower $1.32 billion 2.18 -$37.36 million ($0.15) -110.66

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

Profitability

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

Net Margins Return on Equity Return on Assets
Applied Optoelectronics -25.50% -12.75% -7.19%
SunPower -1.23% -3.50% -0.90%

Institutional and Insider Ownership

45.9% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 36.6% of SunPower shares are held by institutional investors. 6.9% of Applied Optoelectronics shares are held by company insiders. Comparatively, 0.7% of SunPower shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Applied Optoelectronics has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, SunPower has a beta of 2.05, suggesting that its share price is 105% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Applied Optoelectronics and SunPower, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 1 1 0 0 1.50
SunPower 2 7 3 0 2.08

Applied Optoelectronics presently has a consensus price target of $3.90, suggesting a potential upside of 70.31%. SunPower has a consensus price target of $22.42, suggesting a potential upside of 35.04%. Given Applied Optoelectronics’ higher possible upside, research analysts plainly believe Applied Optoelectronics is more favorable than SunPower.

Summary

SunPower beats Applied Optoelectronics on 10 of the 14 factors compared between the two stocks.

Applied Optoelectronics Company Profile (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.

SunPower Company Profile (Get Rating)

SunPower Corporation, a solar technology and energy services provider, offers solar, storage, and home energy solutions to customers primarily in the United States and Canada. It operates through Residential, Light Commercial; Commercial and Industrial Solutions; and Others segments. The company provides solar, storage, and home energy solutions and components through a combination of its third-party installing and non-installing dealer network and resellers, as well as in-house sales team; and turn-key engineering, procurement, and construction services and sale of energy under power purchase agreements. It also offers commercial roof, carport, and ground mounted systems; and post-installation monitoring and maintenance services. In addition, the company provides residential leasing services, as well as sells inverters manufactured by third parties. It primarily serves investors, financial institutions, project developers, electric utilities, independent power producers, commercial and governmental entities, production home builders, residential owners, and small commercial building owners. The company was incorporated in 1985 and is headquartered in San Jose, California. SunPower Corporation is a subsidiary of TotalEnergies SE.

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