Proto Labs (NYSE:PRLB) & Highway (NASDAQ:HIHO) Financial Analysis

Highway (NASDAQ:HIHO) and Proto Labs (NYSE:PRLB) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Highway and Proto Labs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Highway	-28.08%	-25.93%	-15.72%
Proto Labs	5.44%	4.80%	4.22%

Volatility and Risk

Highway has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Proto Labs has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500.

Institutional and Insider Ownership

13.2% of Highway shares are held by institutional investors. Comparatively, 84.5% of Proto Labs shares are held by institutional investors. 32.1% of Highway shares are held by insiders. Comparatively, 1.3% of Proto Labs 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 Ratings

This is a summary of recent recommendations for Highway and Proto Labs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Highway	1	0	0	0	1.00
Proto Labs	0	1	2	1	3.00

Proto Labs has a consensus target price of $89.00, suggesting a potential downside of 9.41%. Given Proto Labs’ stronger consensus rating and higher probable upside, analysts plainly believe Proto Labs is more favorable than Highway.

Valuation and Earnings

This table compares Highway and Proto Labs”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Highway	$4.80 million	0.87	-$1.52 million	($0.32)	-2.83
Proto Labs	$533.13 million	4.41	$21.24 million	$1.25	78.60

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

Summary

Proto Labs beats Highway on 14 of the 15 factors compared between the two stocks.

About Highway

Highway Holdings Limited, together with its subsidiaries, manufactures and supplies metal, plastic, electric, and electronic components, subassemblies, and finished products for original equipment manufacturers (OEMs) and contract manufacturers. It operates through two segments, Metal Stamping and Mechanical OEM; and Electric OEM. The company also trades in plastic injection products; and manufactures and assembles automation equipment. Its products are used in the manufacture of products, such as photocopiers, laser printers, print cartridges, electrical connectors, electrical circuits, vacuum cleaners, LED power supplies, stepping motors, pumps for dishwashers, and other washing machine components. In addition, the company assists customers in the design and development of the tooling used in the metal and plastic manufacturing process, as well as provides an array of other manufacturing and engineering services, including metal stamping, screen printing, plastic injection molding, pad printing, and electronic assembly of printed circuit boards. It operates in Hong Kong and China, Europe, North America, and other Asian countries. Highway Holdings Limited was incorporated in 1990 and is headquartered in Sheung Shui, Hong Kong.

About Proto Labs

Proto Labs, Inc., together with its subsidiaries, operates as a digital manufacturer of custom parts in the United States and Europe. The company offers injection molding; computer numerical control machining; three-dimensional printing; and sheet metal fabrication products. It serves developers and engineers, who use 3D computer-aided design software to design products across a range of end-markets. Proto Labs, Inc. was incorporated in 1999 and is headquartered in Maple Plain, Minnesota.