Harmonic (NASDAQ:HLIT) and AltiGen Communications (OTCMKTS:ATGN) Financial Contrast

AltiGen Communications (OTCMKTS:ATGN) and Harmonic (NASDAQ:HLIT) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Insider & Institutional Ownership

99.4% of Harmonic shares are owned by institutional investors. 14.0% of AltiGen Communications shares are owned by insiders. Comparatively, 1.2% of Harmonic shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares AltiGen Communications and Harmonic”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AltiGen Communications	$13.87 million	0.81	$740,000.00	$0.02	21.83
Harmonic	$360.52 million	3.21	-$43.31 million	($0.39)	-26.90

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

Volatility and Risk

AltiGen Communications has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Harmonic has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for AltiGen Communications and Harmonic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AltiGen Communications	0	0	0	0	0.00
Harmonic	2	1	2	0	2.00

Harmonic has a consensus price target of $14.50, suggesting a potential upside of 38.23%. Given Harmonic’s stronger consensus rating and higher possible upside, analysts clearly believe Harmonic is more favorable than AltiGen Communications.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AltiGen Communications	5.51%	6.33%	5.37%
Harmonic	-7.59%	5.91%	3.35%

About AltiGen Communications

Altigen Communications, Inc. designs, develops, markets, and supports integrated communications solutions worldwide. It provides MaxCS IP-PBX, a software-based phone system that provides customers with business communications solutions; MaxACD Voice Over Internet Protocol (VoIP) Contact Center, a software-based automatic call distribution engine, which offers call routing and call distribution options; MaxMobile that extends a set of business PBX functionality to smart phone devices; and MaxCommunicator, a Windows-based desktop application, which provides call control and visual voice mail management to the desktop. The company offers MaxAgent, a Windows-based desktop application to bring call control and workgroup information to call center agents; MaxSupervisor, a Windows-based desktop application for call center supervisors; and MaxACD for Skype, a call center solution. In addition, it provides hosted services, which include hosted IP PBX, Skype for Business, session initiation protocol trunk, call center solution, voice and video calling, conference calling, and various long-distance services; and software assurance services, which offer customers with software updates, patches, new releases, and technical support for the applications they are licensed to use. The company serves financial services, healthcare, retail, and business services industries through a channel of distributors and resellers. Altigen Communications, Inc. was incorporated in 1994 and is based in Milpitas, 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.