ams-OSRAM (OTCMKTS:AMSSY) and Sono-Tek (NASDAQ:SOTK) Critical Analysis

Sono-Tek (NASDAQ:SOTK) and ams-OSRAM (OTCMKTS:AMSSY) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Profitability

This table compares Sono-Tek and ams-OSRAM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sono-Tek	9.62%	10.55%	8.30%
ams-OSRAM	-6.18%	0.79%	0.11%

Risk & Volatility

Sono-Tek has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500. Comparatively, ams-OSRAM has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Sono-Tek and ams-OSRAM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sono-Tek	0	1	1	0	2.50
ams-OSRAM	1	2	1	0	2.00

Sono-Tek currently has a consensus price target of $8.50, suggesting a potential upside of 60.38%. Given Sono-Tek’s stronger consensus rating and higher possible upside, equities analysts plainly believe Sono-Tek is more favorable than ams-OSRAM.

Insider & Institutional Ownership

47.9% of Sono-Tek shares are held by institutional investors. 5.5% of Sono-Tek shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Sono-Tek and ams-OSRAM”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sono-Tek	$20.91 million	3.98	$1.81 million	$0.13	40.77
ams-OSRAM	$3.76 billion	0.57	-$147.08 million	($1.19)	-8.98

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

Summary

Sono-Tek beats ams-OSRAM on 11 of the 13 factors compared between the two stocks.

About Sono-Tek

Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.

About ams-OSRAM

ams-OSRAM AG designs, manufactures, and sells LED and optical sensor solutions in Europe, the Middle East, Africa, the Americas, and Asia/Pacific. The company operates in Semiconductors and Lamps & Systems segments. The Semiconductors segment offers semiconductor-based products and solutions, such as high-performance LEDs, lasers, and optical sensors for automotive, consumer, and industrial and medical technology end markets. The Lamps & Systems segment provides lamps and lighting systems for the automotive, industrial, and medical end markets. The company was formerly known as ams AG and changed its name to ams-OSRAM AG in January 2022. ams-OSRAM AG is headquartered in Premstätten, Austria.