Data I/O (NASDAQ:DAIO) versus Novanta (NASDAQ:NOVT) Financial Contrast

Data I/O (NASDAQ:DAIO) and Novanta (NASDAQ:NOVT) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Volatility and Risk

Data I/O has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Novanta has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Data I/O and Novanta, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Data I/O	1	1	2	1	2.60
Novanta	0	3	0	0	2.00

Data I/O currently has a consensus target price of $5.11, indicating a potential upside of 70.33%. Novanta has a consensus target price of $133.00, indicating a potential downside of 4.52%. Given Data I/O’s stronger consensus rating and higher probable upside, research analysts clearly believe Data I/O is more favorable than Novanta.

Valuation and Earnings

This table compares Data I/O and Novanta”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Data I/O	$21.77 million	1.29	-$3.09 million	($0.40)	-7.50
Novanta	$949.24 million	5.25	$64.09 million	$1.47	94.76

Novanta has higher revenue and earnings than Data I/O. Data I/O is trading at a lower price-to-earnings ratio than Novanta, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

37.0% of Data I/O shares are owned by institutional investors. Comparatively, 98.4% of Novanta shares are owned by institutional investors. 2.6% of Data I/O shares are owned by company insiders. Comparatively, 1.2% of Novanta shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Data I/O and Novanta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Data I/O	-16.16%	-21.44%	-15.24%
Novanta	5.50%	14.53%	7.82%

Summary

Novanta beats Data I/O on 10 of the 15 factors compared between the two stocks.

About Data I/O

Data I/O Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally. Its programming system products are used to program integrated circuits (ICs) with the specific data for the ICs. The company offers PSV handlers off-line automated programming systems, such as PSV2800 automated programming system which focuses on high-volume manufacturing in a lower cost platform; PSV7000 automated programming system for security deployment upgrades; PSV5000 automated programming system that combines mid-range capacity and supports security deployment; and PSV3500 automated programming system which provides basic programming needs. It also provides SentriX security deployment system; and LumenX and non-automated FlashPAK III programming systems. In addition, the company offers hardware support, system installation and repair, and device programming services. It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, internet of things, and industrial, as well as electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors. Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

About Novanta

Novanta, Inc. engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products. The Vision segment offers a range of medical grade technologies, including medical insufflators, pumps and related disposables, surgical displays and operating room integration technologies, optical data collection and machine vision technologies, radio frequency identification technologies, thermal printers, spectrometry technologies, and embedded touch screen solutions. The Precision Motion segment includes optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components to customers. The company was founded in 1968 and is headquartered in Bedford, MA.