Rubicon Technology (NASDAQ: RBCN) and Sequans Communications (NYSE:SQNS) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Rubicon Technology and Sequans Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rubicon Technology -410.60% -77.35% -73.06%
Sequans Communications -42.44% -212.46% -32.62%

Earnings & Valuation

This table compares Rubicon Technology and Sequans Communications’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rubicon Technology $14.13 million 1.57 -$23.28 million ($21.96) -0.37
Sequans Communications $52.06 million 4.78 -$11.89 million ($0.30) -10.40

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

Volatility & Risk

Rubicon Technology has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 2.49, indicating that its share price is 149% more volatile than the S&P 500.

Insider & Institutional Ownership

34.0% of Sequans Communications shares are held by institutional investors. 12.1% of Rubicon Technology shares are held by insiders. Comparatively, 9.4% of Sequans Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Rubicon Technology and Sequans Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rubicon Technology 0 0 0 0 N/A
Sequans Communications 0 0 5 0 3.00

Sequans Communications has a consensus target price of $5.04, suggesting a potential upside of 61.54%. Given Sequans Communications’ higher possible upside, analysts clearly believe Sequans Communications is more favorable than Rubicon Technology.

Summary

Sequans Communications beats Rubicon Technology on 10 of the 12 factors compared between the two stocks.

About Rubicon Technology

Rubicon Technology, Inc. is a vertically integrated, electronic materials provider specializing in monocrystalline sapphire for applications in light-emitting diodes (LEDs), optical systems and specialty electronic devices. The Company’s product lines include sapphire cores; four and six-inch sapphire wafers; four, six, and eight-inch patterned sapphire substrate (PSS) wafers, and optical sapphire components. Its sapphire is also used as an exterior component in mobile devices, specifically camera lens covers, dual flashes and home buttons on certain newer model smartphones and as the crystal covering the faces of certain smart watches. In addition, some consumer electronics original equipment manufacturers (OEMs) use sapphire faceplates for smartphones. For the LED market, it sells 2 to 6-inch material in core form and four, six and eight-inch material in polished and PSS wafer form. Its principal customers are semiconductor device manufacturers and wafer polishing companies.

About Sequans Communications

Sequans Communications S.A. is a fabless designer, developer and supplier of fourth Generation long term evolution (4G LTE) semiconductor solutions for wireless broadband applications, with a specific focus on the single-mode device market. Its semiconductor solutions integrate baseband processor and radio frequency (RF) transceiver integrated circuits (ICs) along with its signal processing techniques, algorithms and software stacks. In the broadband data device market, its solutions serve as the wireless communications platform in devices, such as smartphones; Universal Serial Bus (USB) dongles; portable routers; embedded wireless modems for laptops, tablets, and other consumer multimedia devices; and customer-premises equipment, such as fixed wireless access modems, routers and residential gateways. The Company’s products include SQN3330, SQN3223, SQN3221, SQN3241, VZ120Q, VZ22Q, VZ22M, US60L, SQN3220, SQN3240, SQN3120, SQN5120, SQN3140, VZ20Q, VZ20M, SQN1210 and SQN1220.

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