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

Profitability

This table compares Xcerra Corporation and Nanometrics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcerra Corporation 5.77% 9.08% 6.71%
Nanometrics 19.94% 11.95% 10.01%

Analyst Ratings

This is a summary of current ratings and price targets for Xcerra Corporation and Nanometrics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra Corporation 0 5 0 0 2.00
Nanometrics 0 0 3 0 3.00

Xcerra Corporation presently has a consensus target price of $10.25, suggesting a potential upside of 3.54%. Nanometrics has a consensus target price of $31.67, suggesting a potential upside of 15.53%. Given Nanometrics’ stronger consensus rating and higher probable upside, analysts plainly believe Nanometrics is more favorable than Xcerra Corporation.

Insider and Institutional Ownership

86.1% of Xcerra Corporation shares are held by institutional investors. Comparatively, 81.3% of Nanometrics shares are held by institutional investors. 2.6% of Xcerra Corporation shares are held by insiders. Comparatively, 6.7% of Nanometrics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Xcerra Corporation has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Nanometrics has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.

Valuation and Earnings

This table compares Xcerra Corporation and Nanometrics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcerra Corporation $390.77 million 1.39 $34.79 million $0.42 23.57
Nanometrics $241.61 million 2.89 $41.73 million $1.88 14.58

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

Summary

Nanometrics beats Xcerra Corporation on 11 of the 13 factors compared between the two stocks.

Xcerra Corporation Company Profile

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

Nanometrics Company Profile

Nanometrics Incorporated is a provider of process control metrology and inspection systems used primarily in the fabrication of semiconductors and other solid-state devices, including sensors, optoelectronic devices, high-brightness (HB) light emitting diodes (LEDs), discretes and data storages components. The Company’s automated and integrated metrology systems measure critical dimensions, device structures, topography and various thin film properties, including three-dimensional features and film thickness, as well as optical, electrical and material properties. The Company’s process control solutions are deployed throughout the fabrication process, from front-end-of-line substrate manufacturing, to production of semiconductors and other devices, to three-dimensional wafer-level packaging applications. The Company’s automated systems primarily consist of automated metrology systems that are employed in semiconductor production environments.

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