Viavi Solutions (NASDAQ:VIAV) and AXT (NASDAQ:AXTI) Head to Head Survey

AXT (NASDAQ:AXTI) and Viavi Solutions (NASDAQ:VIAV) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Risk & Volatility

AXT has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares AXT and Viavi Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AXT	-11.70%	-5.27%	-3.31%
Viavi Solutions	-3.87%	2.90%	1.16%

Institutional and Insider Ownership

49.5% of AXT shares are held by institutional investors. Comparatively, 95.5% of Viavi Solutions shares are held by institutional investors. 8.8% of AXT shares are held by insiders. Comparatively, 1.5% of Viavi Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AXT and Viavi Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AXT	0	0	4	0	3.00
Viavi Solutions	1	2	5	0	2.50

AXT presently has a consensus price target of $4.75, suggesting a potential upside of 241.73%. Viavi Solutions has a consensus price target of $12.69, suggesting a potential upside of 35.84%. Given AXT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe AXT is more favorable than Viavi Solutions.

Valuation and Earnings

This table compares AXT and Viavi Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AXT	$96.03 million	0.66	-$11.62 million	($0.43)	-3.23
Viavi Solutions	$1.05 billion	1.98	-$25.80 million	$0.02	467.00

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

Summary

Viavi Solutions beats AXT on 8 of the 14 factors compared between the two stocks.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.

About Viavi Solutions

Viavi Solutions, Inc. engages in the provision of network test, monitoring, and assurance solutions for communications service providers, enterprises, network equipment manufacturers, government and avionics. It operates through the following segments: Network Enablement, Service Enablement, and Optical Security and Performance. The Network Enablement segment offers an integrated portfolio of testing solutions that access the network to perform build-out and maintenance tasks. The Service Enablement segment covers solutions and services primarily for communication service providers, and enterprises that deliver and/or operate broadband and IP networks (fixed and mobile) supporting voice, video, and data services as well as a wide range of applications. The Optical Security and Performance segment leverages its core optical coating technologies and volume manufacturing capability to design, manufacture, and sell products targeting anti-counterfeiting, consumer and industrial, government, healthcare, and other markets. The company was founded in 1979 and is headquartered in Chandler, AZ.