Analyzing LightPath Technologies (NASDAQ:LPTH) & Fabrinet (NYSE:FN)

LightPath Technologies (NASDAQ:LPTH) and Fabrinet (NYSE:FN) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Volatility and Risk

LightPath Technologies has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Fabrinet has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Profitability

This table compares LightPath Technologies and Fabrinet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LightPath Technologies	-28.65%	-7.02%	-4.13%
Fabrinet	10.19%	21.23%	13.96%

Analyst Ratings

This is a breakdown of current recommendations and price targets for LightPath Technologies and Fabrinet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LightPath Technologies	1	0	4	1	2.83
Fabrinet	0	4	6	0	2.60

LightPath Technologies presently has a consensus price target of $14.10, suggesting a potential upside of 39.05%. Fabrinet has a consensus price target of $649.50, suggesting a potential upside of 70.35%. Given Fabrinet’s higher probable upside, analysts plainly believe Fabrinet is more favorable than LightPath Technologies.

Valuation and Earnings

This table compares LightPath Technologies and Fabrinet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LightPath Technologies	$71.72 million	9.90	-$20.55 million	($0.40)	-25.35
Fabrinet	$4.64 billion	2.94	$473.03 million	$13.05	29.22

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

Institutional and Insider Ownership

56.3% of LightPath Technologies shares are owned by institutional investors. Comparatively, 97.4% of Fabrinet shares are owned by institutional investors. 24.8% of LightPath Technologies shares are owned by company insiders. Comparatively, 0.2% of Fabrinet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Fabrinet beats LightPath Technologies on 10 of the 15 factors compared between the two stocks.

About LightPath Technologies

LightPath Technologies, Inc. designs, develops, manufactures, and distributes optical components and assemblies. The company offers precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light; and infrared products, including catalog and custom infrared optics. Its products are used in defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, and other sectors. The company sells its products directly to customers in Europe and Asia. LightPath Technologies, Inc. was founded in 1985 and is headquartered in Orlando, Florida.

About Fabrinet

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in Grand Cayman, the Cayman Islands.