Atomera (NASDAQ:ATOM – Get Free Report) and AXT (NASDAQ:AXTI – Get Free Report) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.
Institutional & Insider Ownership
30.8% of Atomera shares are held by institutional investors. Comparatively, 49.5% of AXT shares are held by institutional investors. 13.0% of Atomera shares are held by insiders. Comparatively, 8.8% of AXT shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Atomera and AXT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Atomera | N/A | -92.04% | -80.50% |
| AXT | -25.22% | -11.19% | -6.83% |
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Atomera | $140,000.00 | 566.85 | -$18.43 million | ($0.67) | -3.74 |
| AXT | $99.36 million | 13.81 | -$11.62 million | ($0.52) | -47.76 |
AXT has higher revenue and earnings than Atomera. AXT is trading at a lower price-to-earnings ratio than Atomera, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Atomera and AXT, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Atomera | 1 | 0 | 0 | 0 | 1.00 |
| AXT | 1 | 0 | 3 | 0 | 2.50 |
AXT has a consensus price target of $11.50, indicating a potential downside of 53.69%. Given AXT’s stronger consensus rating and higher probable upside, analysts clearly believe AXT is more favorable than Atomera.
Risk and Volatility
Atomera has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, AXT has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500.
Summary
AXT beats Atomera on 10 of the 14 factors compared between the two stocks.
About Atomera
Atomera Incorporated engages in the developing, commercializing, and licensing proprietary processes and technologies for the semiconductor industry in North America and the Asia Pacific. The company's lead technology is the Mears Silicon Technology, a thin film of reengineered silicon that can be applied as a transistor channel enhancement to CMOS-type transistors. Its customers include foundries, integrated device manufacturers, fabless semiconductor manufacturers, original equipment manufacturers, and electronic design automation companies. The company was formerly known as Mears Technologies, Inc. and changed its name to Atomera Incorporated in January 2016. Atomera Incorporated was founded in 2001 and is headquartered in Los Gatos, California.
About AXT
AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.
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