Adeia (NASDAQ:ADEA – Get Rating) and Liberty Latin America (NASDAQ:LILA – Get Rating) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.
Profitability
This table compares Adeia and Liberty Latin America’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Adeia | -43.84% | 21.87% | 9.24% |
| Liberty Latin America | -6.46% | -12.06% | -2.13% |
Volatility & Risk
Adeia has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Liberty Latin America has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Adeia | $438.93 million | 2.25 | -$295.88 million | ($2.86) | -3.24 |
| Liberty Latin America | $4.82 billion | 0.36 | -$175.60 million | ($1.36) | -5.93 |
Liberty Latin America has higher revenue and earnings than Adeia. Liberty Latin America is trading at a lower price-to-earnings ratio than Adeia, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
89.9% of Adeia shares are owned by institutional investors. Comparatively, 15.3% of Liberty Latin America shares are owned by institutional investors. 0.4% of Adeia shares are owned by company insiders. Comparatively, 38.3% of Liberty Latin America shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Adeia and Liberty Latin America, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Adeia | 0 | 0 | 2 | 0 | 3.00 |
| Liberty Latin America | 1 | 0 | 0 | 0 | 1.00 |
Adeia currently has a consensus price target of $15.00, suggesting a potential upside of 61.64%. Given Adeia’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Adeia is more favorable than Liberty Latin America.
Summary
Adeia beats Liberty Latin America on 8 of the 14 factors compared between the two stocks.
About Adeia
Adeia Inc., together with its subsidiaries, operates as a consumer and entertainment product/solutions licensing company worldwide. It licenses its innovations to companies in the entertainment industry under the Adeia brand. The company licenses its patent portfolios across various markets, including multichannel video programming distributors comprising cable, satellite, and telecommunications television providers that aggregate and distribute linear content over networks, as well as television providers that aggregate and stream linear content over broadband networks; over-the-top video service providers, social media, and other new media companies, such as subscription video-on-demand service providers and social media companies; consumer electronics manufacturers, which includes smart televisions, streaming media devices, video game consoles, mobile devices, DVRs, and other connected media devices; and semiconductors, including sensors, radio frequency components, memory, and logic devices. The company was incorporated in 2019 and is headquartered in San Jose, California.
About Liberty Latin America
Liberty Latin America Ltd. is a holding company, which engages in the provision of fixed, mobile, and subsea telecommunications services. It operates through the following segments: C and W Carribean, C and W Panama, Cand W Networks and LatAm, Liberty Puerto Rico, Liberty Costa Rica, and VTR. The company was founded in 2010 and is headquartered in Denver, CO.
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