Head to Head Review: Synaptics (NASDAQ:SYNA) & NeoPhotonics (NYSE:NPTN)

NeoPhotonics (NYSE:NPTNGet Rating) and Synaptics (NASDAQ:SYNAGet Rating) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Risk & Volatility

NeoPhotonics has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Synaptics has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Earnings & Valuation

This table compares NeoPhotonics and Synaptics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NeoPhotonics $290.29 million 2.85 -$40.72 million ($0.64) -24.16
Synaptics $1.34 billion 3.43 $79.60 million $4.77 24.33

Synaptics has higher revenue and earnings than NeoPhotonics. NeoPhotonics is trading at a lower price-to-earnings ratio than Synaptics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NeoPhotonics and Synaptics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NeoPhotonics -10.46% -14.23% -7.21%
Synaptics 12.17% 34.97% 15.80%

Analyst Recommendations

This is a summary of current recommendations for NeoPhotonics and Synaptics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NeoPhotonics 0 6 2 0 2.25
Synaptics 0 3 9 0 2.75

NeoPhotonics presently has a consensus price target of $15.80, indicating a potential upside of 2.20%. Synaptics has a consensus price target of $241.25, indicating a potential upside of 107.90%. Given Synaptics’ stronger consensus rating and higher possible upside, analysts clearly believe Synaptics is more favorable than NeoPhotonics.

Insider & Institutional Ownership

85.6% of NeoPhotonics shares are held by institutional investors. Comparatively, 91.9% of Synaptics shares are held by institutional investors. 4.1% of NeoPhotonics shares are held by insiders. Comparatively, 0.8% of Synaptics shares are held 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

Synaptics beats NeoPhotonics on 13 of the 14 factors compared between the two stocks.

About NeoPhotonics (Get Rating)

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks. It offers transmitter and receiver components, and coherent modules, as well as switching products for 400G and optical transmission applications over distances of approximately 2 to 2,000 kilometers; ultra-narrow linewidth tunable lasers; electro-absorptively modulated lasers; distributed feedback lasers; component lasers; and integrated coherent receivers and modulators. The company also provides pluggable coherent transceivers that combine ultra-narrow linewidth laser with coherent receiver and performance coherent modulator; and 100G products for data center applications. In addition, it offers multi-cast switching solutions for 100G and above coherent systems; and network products and solutions, such as arrayed waveguide gratings, multiplexers, and filters that are used in dense wavelength division multiplexing systems. NeoPhotonics Corporation sells its products to network equipment manufacturers through a direct sales force in North America; Europe; and Asia, including China, Japan, Korea, and Taiwan. The company was formerly known as NanoGram Corporation and changed its name to NeoPhotonics Corporation in 2002. NeoPhotonics Corporation was incorporated in 1996 and is headquartered in San Jose, California.

About Synaptics (Get Rating)

Synaptics Incorporated develops and supplies semiconductor products and solutions worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes or over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in automobiles, notebook personal computers (PCs), PC peripherals, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; and wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, and global navigation satellite system. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

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