Analyzing ADTRAN (NASDAQ:ADTN) and Nexalin Technology (NASDAQ:NXL)

Nexalin Technology (NASDAQ:NXL) and ADTRAN (NASDAQ:ADTN) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Earnings and Valuation

This table compares Nexalin Technology and ADTRAN”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nexalin Technology	$170,000.00	62.53	-$7.61 million	($0.66)	-0.86
ADTRAN	$922.72 million	0.80	-$459.89 million	($1.07)	-8.62

Nexalin Technology has higher earnings, but lower revenue than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than Nexalin Technology, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Nexalin Technology has a beta of 3.94, suggesting that its stock price is 294% more volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Nexalin Technology and ADTRAN, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nexalin Technology	1	0	1	0	2.00
ADTRAN	1	1	3	0	2.40

Nexalin Technology currently has a consensus target price of $5.00, suggesting a potential upside of 777.19%. ADTRAN has a consensus target price of $13.00, suggesting a potential upside of 41.00%. Given Nexalin Technology’s higher probable upside, analysts clearly believe Nexalin Technology is more favorable than ADTRAN.

Profitability

This table compares Nexalin Technology and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nexalin Technology	-5,527.39%	-207.46%	-184.51%
ADTRAN	-8.44%	-4.63%	-0.56%

Institutional and Insider Ownership

0.7% of Nexalin Technology shares are held by institutional investors. Comparatively, 80.6% of ADTRAN shares are held by institutional investors. 25.3% of Nexalin Technology shares are held by company insiders. Comparatively, 1.5% of ADTRAN shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

About Nexalin Technology

Nexalin Technology, Inc., a medical device company, designs and develops neurostimulation products for the treatment of mental health in the United States and China. The company designs and develops Generation 2 and Generation 3, that is in clinical trials for the treatment of substance abuse issues related to opiate, cocaine, alcohol abuse, alzheimer's disease, and dementia. It also licenses and sells Nexalin Device, a non-invasive and undetectable to the human body that can provide relief to its afflicted with mental health issues. The company is based in Houston, Texas.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.