Reviewing Lantronix (NASDAQ:LTRX) and China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY)

China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY) and Lantronix (NASDAQ:LTRX) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation & Earnings

This table compares China Techfaith Wireless Communication Technology and Lantronix”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Techfaith Wireless Communication Technology	N/A	N/A	N/A	N/A	N/A
Lantronix	$118.58 million	2.13	-$11.37 million	($0.17)	-33.76

China Techfaith Wireless Communication Technology has higher earnings, but lower revenue than Lantronix.

Insider & Institutional Ownership

39.4% of Lantronix shares are held by institutional investors. 33.3% of China Techfaith Wireless Communication Technology shares are held by insiders. Comparatively, 2.4% of Lantronix shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

China Techfaith Wireless Communication Technology has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, Lantronix has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for China Techfaith Wireless Communication Technology and Lantronix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Techfaith Wireless Communication Technology	0	0	0	0	0.00
Lantronix	1	0	6	0	2.71

Lantronix has a consensus target price of $10.40, indicating a potential upside of 81.18%. Given Lantronix’s stronger consensus rating and higher possible upside, analysts clearly believe Lantronix is more favorable than China Techfaith Wireless Communication Technology.

Profitability

This table compares China Techfaith Wireless Communication Technology and Lantronix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Techfaith Wireless Communication Technology	N/A	N/A	N/A
Lantronix	-5.52%	-6.79%	-4.17%

Summary

Lantronix beats China Techfaith Wireless Communication Technology on 6 of the 10 factors compared between the two stocks.

About China Techfaith Wireless Communication Technology

China TechFaith Wireless Communication Technology Limited engages in the original design and development of specialized mobile handsets for consumers and enterprises in the People's Republic of China and internationally. It operates through Mobile Phone Business and Real Estate segments. The company offers handset design services through outsourcing of EMS providers who engage in assembly and manufacturing operations; and offer testing services of the assembled printed circuit boards, systems, and subsystems for Chinese mobile handset brand owners and international mobile handset brand owners. It also provides feature phones, smart phones, ruggedized phones, wireless modules, smart pads, and wireless software and applications, as well as other electronic components, such as industrial wireless devices. In addition, the company sells mobile handset products under the Tecface, 17FOX, and MOBIFOX brands. Further, it owns, develops, operates, and manages commercial real estate properties. The company was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

About Lantronix

Lantronix, Inc. provides solutions for video surveillance, infotainment systems, and intelligent substations infrastructure in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT System Solutions, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; Embedded IoT Modules, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and Software and Engineering Services offers SaaS platform that enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login. It also offers telematics devices, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management; network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development. In addition, the company provides console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms; and hardware engineering, software engineering, and mechanical engineering, rapid prototyping and quality assurance engineering services. Lantronix, Inc. was incorporated in 1989 and is based in Irvine, California.