Financial Analysis: LightPath Technologies (NASDAQ:LPTH) vs. SURGE COMPONENT (OTCMKTS:SPRS)

SURGE COMPONENT (OTCMKTS:SPRS) and LightPath Technologies (NASDAQ:LPTH) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Earnings and Valuation

This table compares SURGE COMPONENT and LightPath Technologies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SURGE COMPONENT	$31.21 million	0.53	$830,000.00	$0.15	19.00
LightPath Technologies	$37.20 million	8.93	-$14.87 million	($0.36)	-20.67

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

Profitability

This table compares SURGE COMPONENT and LightPath Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SURGE COMPONENT	2.56%	4.49%	3.47%
LightPath Technologies	-39.92%	-53.40%	-18.17%

Risk & Volatility

SURGE COMPONENT has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, LightPath Technologies has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Institutional and Insider Ownership

56.3% of LightPath Technologies shares are owned by institutional investors. 53.0% of SURGE COMPONENT shares are owned by company insiders. Comparatively, 14.7% of LightPath Technologies shares are owned 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.

Analyst Recommendations

This is a summary of current ratings and target prices for SURGE COMPONENT and LightPath Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SURGE COMPONENT	0	0	0	0	0.00
LightPath Technologies	1	1	4	0	2.50

LightPath Technologies has a consensus target price of $6.50, suggesting a potential downside of 12.63%. Given LightPath Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe LightPath Technologies is more favorable than SURGE COMPONENT.

About SURGE COMPONENT

Surge Components, Inc., together with its subsidiaries, supplies electronic products and components. It offers capacitors, which are electrical energy storage devices; and discrete semiconductor components, such as rectifiers, transistors, diodes, circuit protection devices, and audible components comprising audible transducers, Piezo buzzers, speakers, and microphones. The company also provides resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. Its products are used in the electronic circuitry of various industries, including automotive, computer, communications, cellular telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecom products, computer related products, power supply products, utility meters, and household appliances. The company sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in Canada, China, other Asian countries, South America, and Europe. Surge Components, Inc. was incorporated in 1981 and is headquartered in Deer Park, New York.

About LightPath Technologies

LightPath Technologies, Inc. designs, develops, manufactures, and distributes optical components and assemblies. The company offers precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light; and infrared products, including catalog and custom infrared optics. Its products are used in defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, and other sectors. The company sells its products directly to customers in Europe and Asia. LightPath Technologies, Inc. was founded in 1985 and is headquartered in Orlando, Florida.