Infinera Corporation (NASDAQ: INFN) and Lantronix (NASDAQ:LTRX) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Volatility and Risk

Infinera Corporation has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500. Comparatively, Lantronix has a beta of -0.15, indicating that its stock price is 115% less volatile than the S&P 500.

Earnings and Valuation

This table compares Infinera Corporation and Lantronix’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Infinera Corporation $718.84 million 1.73 -$60.74 million ($0.90) -9.30
Lantronix $44.73 million 0.78 $657,000.00 ($0.02) -97.50

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

Profitability

This table compares Infinera Corporation and Lantronix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Infinera Corporation -18.18% -12.39% -7.88%
Lantronix -0.62% 2.55% 1.76%

Institutional and Insider Ownership

86.7% of Infinera Corporation shares are owned by institutional investors. Comparatively, 17.6% of Lantronix shares are owned by institutional investors. 2.9% of Infinera Corporation shares are owned by company insiders. Comparatively, 52.0% of Lantronix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Infinera Corporation and Lantronix, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Infinera Corporation 1 4 9 1 2.67
Lantronix 0 0 1 0 3.00

Infinera Corporation presently has a consensus price target of $11.82, suggesting a potential upside of 41.20%. Lantronix has a consensus price target of $4.00, suggesting a potential upside of 105.13%. Given Lantronix’s stronger consensus rating and higher possible upside, analysts clearly believe Lantronix is more favorable than Infinera Corporation.

Summary

Lantronix beats Infinera Corporation on 8 of the 14 factors compared between the two stocks.

About Infinera Corporation

Infinera Corporation provides optical transport networking equipment, software and services to telecommunications service providers, Internet content providers (ICPs), cable providers, wholesale and enterprise carriers, research and education institutions, enterprise customers and government entities across the globe. The Company’s portfolio consists of the Infinera DTN-X Family, the Infinera DTN platform, the Infinera Cloud Xpress Family, the Infinera XTM Series, the Infinera XTG Series and the Infinera FlexILS platform, addressing long-haul, subsea and metro networks end-to-end. Its technology includes Infinera Intelligent Transport Network Architecture, Infinera Photonic Integrated Circuits, Infinera FlexCoherent Processor, Super-Channels, Sliceable Photonics, Disaggregation, Integrated Digital Switching, Infinera Instant Bandwidth, Infinera Packet-Optical Transport, Multi-layer Switching and Optimization, and Management, Control and Security.

About Lantronix

Lantronix, Inc. is a provider of secure data access and management solutions for Internet of things (IoT) and information technology (IT) assets. The Company organizes its products and solutions into three product lines, including IoT, IT Management and Other. Its IoT products consist of IoT Gateways and IoT Building Blocks. The Company’s IT Management product line includes console management, power management and keyboard video mouse (KVM), products that provide remote out-of-band management (OOBM) access to IT and networking infrastructure deployed in test labs, data centers and server rooms. Its Other product line includes non-focus products, such as the xPrintServer, xSenso and WiBox. Its connectivity solutions serves a range of industries, including data center, medical, security, environmental and government. The Company conducts its business in approximately three geographic regions, including the Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific Japan (APJ).

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