ViaSat (NASDAQ: VSAT) and Lumentum (NASDAQ:LITE) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Insider & Institutional Ownership

99.4% of ViaSat shares are held by institutional investors. Comparatively, 95.7% of Lumentum shares are held by institutional investors. 7.7% of ViaSat shares are held by company insiders. Comparatively, 0.8% of Lumentum shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares ViaSat and Lumentum’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ViaSat -0.75% 0.13% 0.08%
Lumentum -9.32% 15.99% 7.94%

Valuation & Earnings

This table compares ViaSat and Lumentum’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ViaSat $1.56 billion 2.78 $23.76 million ($0.21) -353.95
Lumentum $1.00 billion 3.16 -$102.50 million ($1.53) -33.40

ViaSat has higher revenue and earnings than Lumentum. ViaSat is trading at a lower price-to-earnings ratio than Lumentum, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for ViaSat and Lumentum, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ViaSat 1 5 6 0 2.42
Lumentum 1 3 11 0 2.67

ViaSat currently has a consensus target price of $73.80, indicating a potential downside of 0.71%. Lumentum has a consensus target price of $69.79, indicating a potential upside of 36.57%. Given Lumentum’s stronger consensus rating and higher probable upside, analysts clearly believe Lumentum is more favorable than ViaSat.

Summary

Lumentum beats ViaSat on 7 of the 13 factors compared between the two stocks.

ViaSat Company Profile

ViaSat, Inc. is engaged in broadband technologies and services. The Company operates through three segments: satellite services, commercial networks and government systems. The satellite services segment provides satellite-based broadband services to consumers, enterprises, commercial airlines and mobile broadband customers primarily in the United States. The commercial networks segment develops and produces a range of end-to-end satellite and wireless communication systems, ground networking equipment and space-to-earth connectivity systems. The government systems segment develops and produces network-centric Internet Protocol (IP)-based fixed and mobile secure government communications systems, products, services and solutions, which are designed to enable the collection and dissemination of real-time digital information between command centers, communications nodes and air defense systems.

Lumentum Company Profile

Lumentum Holdings Inc. is a provider of optical and photonic products for a range of end market applications, including data communications (Datacom) and telecommunications (Telecom) networking and commercial lasers (commercial lasers) for manufacturing, inspection and life-science applications. The Company operates in two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The Company’s OpComms products include a range of components, modules and subsystems to support and maintain customers in its two primary markets: Telecom and Datacom. The Company’s Lasers products serve customers in markets and applications, such as manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining, such as drilling in printed circuit boards, wafer singulation and solar cell scribing. The Company’s customers include original equipment manufacturers (OEMs).

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