Lumentum (NASDAQ:LITE) & Harmonic (NASDAQ:HLIT) Head to Head Comparison

Lumentum (NASDAQ:LITE) and Harmonic (NASDAQ:HLIT) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Profitability

This table compares Lumentum and Harmonic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lumentum	1.57%	-3.02%	-0.71%
Harmonic	9.96%	17.83%	10.23%

Insider & Institutional Ownership

94.1% of Lumentum shares are held by institutional investors. Comparatively, 99.4% of Harmonic shares are held by institutional investors. 0.2% of Lumentum shares are held by insiders. Comparatively, 1.2% of Harmonic 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.

Earnings and Valuation

This table compares Lumentum and Harmonic”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lumentum	$1.65 billion	6.93	$25.90 million	$0.23	708.78
Harmonic	$689.08 million	1.64	$39.22 million	$0.59	16.80

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Lumentum and Harmonic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lumentum	0	4	12	2	2.89
Harmonic	1	2	4	0	2.43

Lumentum currently has a consensus target price of $128.00, indicating a potential downside of 21.48%. Harmonic has a consensus target price of $11.67, indicating a potential upside of 17.73%. Given Harmonic’s higher probable upside, analysts plainly believe Harmonic is more favorable than Lumentum.

Risk & Volatility

Lumentum has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500. Comparatively, Harmonic has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Summary

Harmonic beats Lumentum on 8 of the 15 factors compared between the two stocks.

About Lumentum

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, solar cell processing, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.

About Harmonic

Harmonic Inc., together with its subsidiaries, provides broadband solutions worldwide. The company operates through Broadband and Video segments. The Broadband segment sells broadband access solutions and related services, including cOS software-based broadband access solutions to broadband operators; and cOS central cloud services, a subscription service for cOS customers. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telco Pay-TV service providers, as well as to broadcast and media, including streaming media companies. Its video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors. This segment also provides VOS360 SaaS platform that provides both streaming and channel origination and distribution services; and software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, VOD, catch-up TV, start-over TV, network-DVR and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, integration services, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was incorporated in 1988 and is headquartered in San Jose, California.