Head to Head Review: Neonode (NEON) & Nortech Systems (NSYS)

Neonode (NASDAQ:NEON) and Nortech Systems (NASDAQ:NSYS) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Neonode and Nortech Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neonode -45.68% -53.96% -33.92%
Nortech Systems -2.22% -0.56% -0.21%

Earnings & Valuation

This table compares Neonode and Nortech Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Neonode $10.24 million 1.16 -$4.70 million ($0.90) -2.24
Nortech Systems $112.33 million 0.10 -$2.44 million N/A N/A

Nortech Systems has higher revenue and earnings than Neonode.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Neonode and Nortech Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neonode 0 0 1 0 3.00
Nortech Systems 0 0 0 0 N/A

Neonode currently has a consensus target price of $10.00, indicating a potential upside of 395.05%. Given Neonode’s higher possible upside, analysts clearly believe Neonode is more favorable than Nortech Systems.

Volatility & Risk

Neonode has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Nortech Systems has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

2.4% of Nortech Systems shares are owned by institutional investors. 9.4% of Neonode shares are owned by insiders. Comparatively, 6.2% of Nortech Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Nortech Systems beats Neonode on 7 of the 11 factors compared between the two stocks.

About Neonode

Neonode Inc., together with its subsidiaries, develops and licenses user interface and optical interactive touch solutions under zForce brand name in the United States, Sweden, Japan, China, Germany, Taiwan, South Korea, Canada, Singapore, and internationally. It develops optical touch and gesture solutions for human interaction with devices, including automotive systems, printers, medical devices, PC devices, monitors, mobile phones, tablets, and e-readers. The company licenses its touch technology to original equipment manufacturers and Tier 1 suppliers. It also provides engineering consulting services. In addition, the company sells Neonode branded sensor products, such as AirBar PC touch products through distributors and directly to consumers. Neonode Inc. is based in Stockholm, Sweden.

About Nortech Systems

Nortech Systems Incorporated operates as an electronic manufacturing services company in the United States, Mexico, and China. The company provides value-added engineering, technical and manufacturing, and support services, including project management, designing, testing, prototyping, supply chain management, and post-market services. It offers manufacturing and engineering services for medical devices, as well as printed circuit board, wire and cable, and higher level electromechanical assemblies. The company also provides repair services. It serves original equipment manufacturers in the aerospace and defense, medical, and industrial markets through business development teams and independent manufacturers' representatives. The company was founded in 1981 and is headquartered in Maple Grove, Minnesota.

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