Digi International (NASDAQ: DGII) and Harmonic (NASDAQ:HLIT) are both small-cap technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.
This table compares Digi International and Harmonic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
78.0% of Digi International shares are held by institutional investors. Comparatively, 94.2% of Harmonic shares are held by institutional investors. 6.9% of Digi International shares are held by company insiders. Comparatively, 5.5% of Harmonic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Digi International and Harmonic’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Digi International||$181.63 million||1.46||$9.36 million||$0.35||28.57|
|Harmonic||$405.91 million||0.83||-$72.31 million||($1.01)||-4.11|
Digi International has higher revenue, but lower earnings than Harmonic. Harmonic is trading at a lower price-to-earnings ratio than Digi International, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Digi International and Harmonic, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Digi International presently has a consensus target price of $14.50, suggesting a potential upside of 45.00%. Harmonic has a consensus target price of $5.33, suggesting a potential upside of 28.51%. Given Digi International’s stronger consensus rating and higher possible upside, equities analysts clearly believe Digi International is more favorable than Harmonic.
Volatility & Risk
Digi International has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Harmonic has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.
Digi International beats Harmonic on 11 of the 13 factors compared between the two stocks.
About Digi International
Digi International Inc. is a provider of mission and business-critical machine-to-machine (M2M) and Internet-of-Things (IoT) connectivity products and services. The Company creates connected products and deploys and manages critical communications infrastructures in a range of environments. It offers four categories of hardware products: cellular routers and gateways, radio frequency (RF), embedded and network products. The Company’s cellular product category includes its cellular routers and all gateways. The Company’s RF product category includes its XBee modules, as well as other RF Solutions. Its embedded product category includes Digi Connect and Rabbit embedded systems on module and single board computers. Its network product category includes console and serial servers and universal serial bus (USB) connected products. The Company’s service offerings include wireless design services, Digi Device Cloud (which includes Digi Remote Manager) and enterprise support services.
Harmonic Inc. (Harmonic) designs, manufactures and sells video infrastructure products, and system solutions. The Company has two segments: Video and Cable Edge. Harmonic provides technical support and professional services to its customers around the world. The Video segment sells video processing and production, and playout solutions and services to broadcast and media companies, streaming media companies, cable operators, and satellite and telecommunications (telco), and pay television (TV) service providers. Its Cable Edge business sells cable edge solutions and related services to cable operators around the world. The Video segment offers a range of products and solutions, as well as software-based media processing platforms. The Company’s Narrowcast Services Gateway (NSG) products are integrated edge gateway products that integrate routing, multiplexing, scrambling and modulation into a single package for the delivery of narrowcast services to subscribers over cable networks.
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