Critical Review: Applied Optoelectronics (NASDAQ:AAOI) & eMagin (NYSE:EMAN)

Applied Optoelectronics (NASDAQ:AAOIGet Rating) and eMagin (NYSE:EMANGet Rating) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Volatility & Risk

Applied Optoelectronics has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, eMagin has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Valuation & Earnings

This table compares Applied Optoelectronics and eMagin’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $211.57 million 0.24 -$54.16 million ($2.01) -0.93
eMagin $26.05 million 1.55 -$5.21 million ($0.08) -6.88

eMagin has lower revenue, but higher earnings than Applied Optoelectronics. eMagin is trading at a lower price-to-earnings ratio than Applied Optoelectronics, indicating that it is currently the more affordable of the two stocks.


This table compares Applied Optoelectronics and eMagin’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics -25.50% -12.75% -7.19%
eMagin -0.95% -23.26% -7.52%

Analyst Ratings

This is a summary of recent ratings and target prices for Applied Optoelectronics and eMagin, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 1 1 0 0 1.50
eMagin 0 0 0 0 N/A

Applied Optoelectronics currently has a consensus price target of $3.90, indicating a potential upside of 109.68%. Given Applied Optoelectronics’ higher possible upside, equities research analysts clearly believe Applied Optoelectronics is more favorable than eMagin.

Insider & Institutional Ownership

45.9% of Applied Optoelectronics shares are owned by institutional investors. Comparatively, 41.3% of eMagin shares are owned by institutional investors. 4.5% of Applied Optoelectronics shares are owned by insiders. Comparatively, 5.5% of eMagin shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.


Applied Optoelectronics beats eMagin on 7 of the 12 factors compared between the two stocks.

Applied Optoelectronics Company Profile (Get Rating)

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, subassemblies, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to internet data center operators, cable television and telecom equipment manufacturers, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

eMagin Company Profile (Get Rating)

eMagin Corporation engages in the design, develop, manufacture, and market of organic light-emitting diode (OLED) miniature displays on-silicon micro displays, virtual imaging products that utilize OLED micro displays, and related products in the United States and internationally. It offers super video graphics array (SVGA) + OLED micro displays; digital SVGA OLED-XL; super extended graphics array OLED-XL/XLS; video graphics array OLED-XL; and widescreen ultra-extended graphics array OLED-XL. The company also provides design reference kits, which include a micro display and associated electronics to help original equipment manufacturers (OEMs) to evaluate micro display products; near-eye virtual imaging modules that incorporate its OLED-on-silicon micro displays with its lenses and electronic interfaces for integration into OEM products; prism optics, a molded plastic prism lens that permits its AMOLED micro displays to provide realistic images that can be viewed for extended periods with reduced eye-fatigue; and driver boards. Its products are used in military aviation helmets, military weapons sights and targeting systems, night vision and thermal imaging devices, training and simulation, visualization for ocular surgery, mobile ultrasound, and augmented reality applications. The company was founded in 1996 and is headquartered in Hopewell Junction, New York.

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