Critical Review: Neonode (NASDAQ:NEON) versus Elcom International (OTCMKTS:ELCO)

Elcom International (OTCMKTS:ELCO) and Neonode (NASDAQ:NEON) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Elcom International and Neonode’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Elcom International	N/A	N/A	N/A
Neonode	-241.38%	-40.64%	-35.78%

Analyst Ratings

This is a summary of recent ratings and price targets for Elcom International and Neonode, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elcom International	0	0	0	0	0.00
Neonode	1	1	0	0	1.50

Neonode has a consensus price target of $6.00, suggesting a potential upside of 112.77%. Given Neonode’s stronger consensus rating and higher probable upside, analysts plainly believe Neonode is more favorable than Elcom International.

Insider & Institutional Ownership

11.6% of Neonode shares are held by institutional investors. 13.6% of Elcom International shares are held by company insiders. Comparatively, 23.9% of Neonode shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Elcom International and Neonode”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elcom International	N/A	N/A	N/A	N/A	N/A
Neonode	$2.61 million	18.17	-$6.47 million	($0.30)	-9.40

Elcom International has higher earnings, but lower revenue than Neonode.

Risk & Volatility

Elcom International has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Neonode has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Summary

Neonode beats Elcom International on 6 of the 9 factors compared between the two stocks.

About Elcom International

Elcom International Inc. provides cloud based e-procurement solutions worldwide. It offers Procure to Pay solutions to publish and manage supplier content, connect to buyers, and analyze spend and procurement processes; eInvoicing solutions to send and receive eInvoices with supplier adoption guaranteed; and sourcing functions to investigate potential suppliers on a local and global basis. The company also provides services for buyers, including catalog processing, development of punchout catalogs, and to integrate Elcom’s PECOS solution into existing purchasing processes; and services for suppliers, such as onboarding of new suppliers to utilize the solution, access to demand generating activities, and to access information and bids that relate to products and services. It offers eProcurement solutions for governments, educational institutions, healthcare organizations, private enterprises, buying groups. Elcom International Inc. was founded in 1992 and is based in Braintree, Massachusetts.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.