Acacia Communications (NASDAQ:ACIA) and On Track Innovations (NASDAQ:OTIV) 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 earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Analyst Ratings

This is a summary of recent recommendations for Acacia Communications and On Track Innovations, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 2 4 9 0 2.47
On Track Innovations 0 1 1 0 2.50

Acacia Communications currently has a consensus price target of $45.21, indicating a potential upside of 14.12%. On Track Innovations has a consensus price target of $2.00, indicating a potential upside of 156.41%. Given On Track Innovations’ stronger consensus rating and higher probable upside, analysts plainly believe On Track Innovations is more favorable than Acacia Communications.

Volatility & Risk

Acacia Communications has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, On Track Innovations has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Insider and Institutional Ownership

82.3% of Acacia Communications shares are held by institutional investors. Comparatively, 5.0% of On Track Innovations shares are held by institutional investors. 33.2% of Acacia Communications shares are held by insiders. Comparatively, 1.0% of On Track Innovations 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.

Profitability

This table compares Acacia Communications and On Track Innovations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Communications -7.68% 2.11% 1.77%
On Track Innovations -5.90% -9.12% -4.25%

Earnings & Valuation

This table compares Acacia Communications and On Track Innovations’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Communications $385.17 million 4.16 $38.50 million $1.19 33.29
On Track Innovations $22.38 million 1.44 -$590,000.00 ($0.04) -19.50

Acacia Communications has higher revenue and earnings than On Track Innovations. On Track Innovations is trading at a lower price-to-earnings ratio than Acacia Communications, indicating that it is currently the more affordable of the two stocks.

Summary

Acacia Communications beats On Track Innovations on 11 of the 14 factors compared between the two stocks.

About Acacia Communications

Acacia Communications, Inc. develops, manufactures, and sells high-speed coherent optical interconnect products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. Its products include a series of low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits that are integrated into families of optical interconnect modules with transmission speeds ranging from 100 to 400 gigabits per second for use in long-haul, metro, and inter-data center markets. The company sells its products through a direct sales force to network equipment manufacturers, network operators, and cloud service providers. Acacia Communications, Inc. was founded in 2009 and is headquartered in Maynard, Massachusetts.

About On Track Innovations

On Track Innovations Ltd. designs, develops, and markets cashless payment solutions worldwide. It operates through Retail and Mass Transit Ticketing; and Petroleum segments. The company offers OTI UNO, a single interface and contactless reader that support the major card associations' applications, as well as wallets such as Apple Pay, Google Pay, and Samsung Pay; OTI TRIO, a near-field communication and contactless reader, which offers three-in-one cashless payment card options comprising magnetic stripe (swipe), contact (chip), and contactless (tap); and OTI Interno, an original equipment manufacturer reader module with integrated antenna used for integration into mass transit validators and terminals. It also provides OTI TeleBox which enables communication between machines primarily for vending machines, kiosks, and meters; OTI GoBox, a machine-to-machine cashless payment and telemetry gateway primarily used to stream Full-HD media and run either Linux or Android; otiMetry, a telemetry solution for smart vending which also enables cashless payments; otiKiosk, a cashless payment acceptance and remote management solution for kiosks and self-service environments; and otiPulse, a cashless payment solution for pulse operated machines. In addition, the company offers ticket vending machines which are encoding and loading electronic card tickets for the public transport and for selling paper tickets, as well as resells tickets through point of sale terminals. Further, it provides EasyFuel Plus, a fuel management solution used to control and manage refueling operations; and MediSmart, an information management and claims submission system for the medical sector. The company was formerly known as De-Bug Innovations Ltd. and changed its name to On Track Innovations Ltd. in July 1991. On Track Innovations Ltd. was founded in 1990 and is headquartered in Rosh Pina, Israel.

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