Advanced Energy (NASDAQ: AEIS) and Neonode (NASDAQ:NEON) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Profitability

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This table compares Advanced Energy and Neonode’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Energy 20.55% 35.06% 25.41%
Neonode -45.94% -80.84% -39.17%

Valuation & Earnings

This table compares Advanced Energy and Neonode’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Energy $671.01 million 4.06 $137.86 million $4.23 16.21
Neonode $10.24 million 2.63 -$4.70 million ($0.09) -5.11

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

Institutional & Insider Ownership

94.4% of Advanced Energy shares are held by institutional investors. Comparatively, 13.5% of Neonode shares are held by institutional investors. 1.2% of Advanced Energy shares are held by company insiders. Comparatively, 14.9% of Neonode shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Advanced Energy and Neonode, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Energy 0 2 2 0 2.50
Neonode 0 1 1 0 2.50

Advanced Energy currently has a consensus price target of $90.33, suggesting a potential upside of 31.76%. Neonode has a consensus price target of $1.00, suggesting a potential upside of 117.39%. Given Neonode’s higher probable upside, analysts clearly believe Neonode is more favorable than Advanced Energy.

Volatility & Risk

Advanced Energy has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Neonode has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Summary

Advanced Energy beats Neonode on 11 of the 13 factors compared between the two stocks.

Advanced Energy Company Profile

Advanced Energy Industries, Inc., together with its subsidiaries, designs, manufactures, sells, and supports power conversion and control products that transform electrical power into various usable forms. It offers process power systems, including direct current (DC), pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation. The company also provides power control modules and thermal instrumentation products for rapid thermal processing, chemical vapor deposition, crystal growing, and other semiconductor and solar applications, as well as in chemical processing, glass manufacturing, and other general industrial power applications; and high voltage products for various applications, including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing, and analytical x-ray systems for industrial and analytical applications. In addition, it offers repair services, conversions, upgrades, and refurbishments and used equipment to companies. The company markets and sells its products through direct sales force, independent sales representatives, and distributors in the North America, Europe, and Asia. Advanced Energy Industries, Inc. was founded in 1981 and is headquartered in Fort Collins, Colorado.

Neonode Company Profile

Neonode Inc., together with its subsidiaries, develops and licenses user interfaces and optical interactive touch solutions in the United States, Sweden, Japan, China, Germany, Taiwan, South Korea, Italy, and internationally. The company develops optical touch and gesture solutions for human interaction with devices. It licenses its multi-touch technology to original equipment manufacturers and Tier 1 suppliers, who incorporate it into devices they develop, manufacture, and sell, including automotive, as well as in consumer electronics, such as printers and office equipment, e-readers, and tablets. The company offers its technology under the zForce brand name. It also provides engineering consulting services. In addition, the company sells Neonode branded sensor products, such as AirBar through distributors and directly to consumers. Neonode Inc. is based in Stockholm, Sweden.

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