Applied Optoelectronics (NASDAQ:AAOI – Get Free Report) and SmartKem (NASDAQ:SMTK – Get Free Report) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.
Valuation & Earnings
This table compares Applied Optoelectronics and SmartKem”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Applied Optoelectronics | $455.71 million | 27.62 | -$38.23 million | ($0.65) | -245.26 |
| SmartKem | $700,000.00 | 10.23 | -$10.51 million | ($1.28) | -0.26 |
Profitability
This table compares Applied Optoelectronics and SmartKem’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Applied Optoelectronics | -8.39% | -5.29% | -2.99% |
| SmartKem | -1,507.75% | -610.88% | -267.27% |
Risk and Volatility
Applied Optoelectronics has a beta of 3.23, suggesting that its stock price is 223% more volatile than the S&P 500. Comparatively, SmartKem has a beta of 4.99, suggesting that its stock price is 399% more volatile than the S&P 500.
Insider and Institutional Ownership
61.7% of Applied Optoelectronics shares are held by institutional investors. 4.5% of Applied Optoelectronics shares are held by insiders. Comparatively, 13.8% of SmartKem shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Applied Optoelectronics and SmartKem, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Applied Optoelectronics | 1 | 3 | 3 | 0 | 2.29 |
| SmartKem | 1 | 0 | 0 | 0 | 1.00 |
Applied Optoelectronics presently has a consensus target price of $52.80, indicating a potential downside of 66.88%. Given Applied Optoelectronics’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Applied Optoelectronics is more favorable than SmartKem.
Summary
Applied Optoelectronics beats SmartKem on 10 of the 14 factors compared between the two stocks.
About Applied Optoelectronics
Applied Optoelectronics, Inc. designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.
About SmartKem
SmartKem, Inc. develops electronics transistors using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including next generation MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.
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