MRV Communications (NASDAQ: MRVC) and NETGEAR (NASDAQ:NTGR) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitabiliy, institutional ownership, dividends, earnings, valuation and risk.
This table compares MRV Communications and NETGEAR’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
MRV Communications has a beta of -1.9, suggesting that its share price is 290% less volatile than the S&P 500. Comparatively, NETGEAR has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.
Earnings and Valuation
This table compares MRV Communications and NETGEAR’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MRV Communications||$82.61 million||0.81||-$5.04 million||($1.27)||-7.76|
|NETGEAR||$1.34 billion||1.07||$143.73 million||$2.22||19.95|
NETGEAR has higher revenue and earnings than MRV Communications. MRV Communications is trading at a lower price-to-earnings ratio than NETGEAR, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for MRV Communications and NETGEAR, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MRV Communications currently has a consensus price target of $14.00, indicating a potential upside of 42.13%. NETGEAR has a consensus price target of $63.00, indicating a potential upside of 42.21%. Given NETGEAR’s higher possible upside, analysts plainly believe NETGEAR is more favorable than MRV Communications.
Institutional & Insider Ownership
42.1% of MRV Communications shares are owned by institutional investors. Comparatively, 98.8% of NETGEAR shares are owned by institutional investors. 5.5% of MRV Communications shares are owned by insiders. Comparatively, 6.2% of NETGEAR shares are owned 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.
NETGEAR beats MRV Communications on 12 of the 13 factors compared between the two stocks.
About MRV Communications
MRV Communications, Inc. (MRV) is a supplier of communications solutions to telecommunications service providers, enterprises and governments throughout the world. The Company’s products enable customers to provide high-bandwidth data, and video services and mobile communications services. The Company operates through Network Equipment segment. Its Network Equipment segment designs, manufactures, sells and services equipment used by commercial customers, governments and telecommunications service providers. Its products include switches, optical transport platforms, physical layer products and out-of-band management products, and specialized networking products. MRV markets and sells its products, through a range of channels, which include a direct sales force, manufacturers’ representatives, value-added-resellers, distributors and systems integrators. The Network Equipment business includes two business units: Optical Communications Systems division and Appointech, Inc.
NETGEAR, Inc. designs, develops and markets networking solutions and smart connected products for consumers, businesses and service providers. The Company’s product line consists of devices, such as network attached storage, Internet protocol (IP) security cameras, and home automation devices and services. The Company’s segments include retail, commercial and service provider. The retail business unit is focused on individual consumers and consists of whole home wireless fidelity (WiFi) networking solutions and Smart connected products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, including fourth-generation (4G) long term evolution (LTE) hotspots sold to service providers for sale to their subscribers.
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