Giga-tronics (OTCMKTS:GIGA) and Exfo (NASDAQ:EXFO) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional & Insider Ownership

0.0% of Giga-tronics shares are owned by institutional investors. Comparatively, 11.2% of Exfo shares are owned by institutional investors. 12.9% of Giga-tronics shares are owned by company insiders. Comparatively, 20.0% of Exfo shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Giga-tronics and Exfo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Giga-tronics 0 0 0 0 N/A
Exfo 0 5 0 0 2.00

Exfo has a consensus target price of $4.06, indicating a potential upside of 34.97%. Given Exfo’s higher probable upside, analysts clearly believe Exfo is more favorable than Giga-tronics.

Volatility and Risk

Giga-tronics has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, Exfo has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Valuation and Earnings

This table compares Giga-tronics and Exfo’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Giga-tronics $9.80 million 0.30 -$3.10 million N/A N/A
Exfo $269.55 million 0.62 -$11.90 million $0.09 33.44

Giga-tronics has higher earnings, but lower revenue than Exfo.

Profitability

This table compares Giga-tronics and Exfo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Giga-tronics -19.62% N/A -32.55%
Exfo -4.42% 2.90% 1.92%

Summary

Exfo beats Giga-tronics on 9 of the 10 factors compared between the two stocks.

Giga-tronics Company Profile

Giga-tronics Incorporated, together with its subsidiaries, designs, manufactures, and markets modular test products for electronic warfare in the Americas, Europe, Asia, and internationally. The company operates through two segments, Microsource and the Giga-tronics Division. The Microsource segment develops and manufactures a line of yttrium, iron, and garnet tuned oscillators, filters, and microwave synthesizers for use in operational applications, as well as in manufacturing a range of microwave instruments and devices. The Giga-tronics Division segment designs, manufactures, and markets a modular microwave test products primarily for testing RADAR and electronic warfare equipment of the defense electronics market. This segment serves prime defense contractors, the armed services, and research institutes. Giga-tronics Incorporated was founded in 1980 and is based in Dublin, California.

Exfo Company Profile

EXFO Inc. develops, manufactures, and markets smarter network test, monitoring, and analytics solutions for communications service providers, network equipment manufacturers, and Webscale companies. It offers lab and manufacturing testing systems, including lab platforms; network simulation and load testing tools to meet the mobile telecom and VOIP/IMS network test challenges; transport and datacom solutions, such as Ethernet testing, fiber channel testing, DSn/PDH and SONET/SDH testing, synchronization testing, and SONET/SDH, OTN, and multiservice testing solutions; and optical products comprising power meters, light sources and amplifiers, variable attenuators, switch and utility modules, polarization analysis, optical communication analyzers, spectral testing products, bit-error-rate testing products, optical benchtop kits, osics multifunction platform, optical component testers, and tunable filters. The company also provides field network testing products, including FTB Ecosystem test tools; FTB platforms; test function virtualization solutions; transport and datacom solutions designed to address DSn/PDH and SONET/SDH, carrier Ethernet, testing needs; optical instruments; copper access/triple-play handheld instruments to assess the quality of access network physical layer and performance of multiplay services; mobile broadband tools to meet mobile telecom network test challenges; and wireless network testing solutions. In addition, it offers service assurance platforms, fiber network monitoring and management solutions, and remote network monitoring solutions; and solutions for FTTx access networks and metro/core networks, as well as technical support, instrument, and system services. The company sells products through its direct sales force, sales representatives, and distributors in the United States, Canada, and others. EXFO Inc. was founded in 1985 and is headquartered in Quebec, Canada. EXFO Inc. is a subsidiary of G. Lamonde Investissements Financiers Inc.

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