Applied Optoelectronics (NASDAQ:AAOI) vs. Alpha and Omega Semiconductor (NASDAQ:AOSL) Head to Head Analysis

Applied Optoelectronics (NASDAQ:AAOI) and Alpha and Omega Semiconductor (NASDAQ:AOSL) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Insider & Institutional Ownership

61.7% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 79.0% of Alpha and Omega Semiconductor shares are held by institutional investors. 4.5% of Applied Optoelectronics shares are held by insiders. Comparatively, 16.7% of Alpha and Omega Semiconductor shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Applied Optoelectronics and Alpha and Omega Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Optoelectronics	2	1	4	0	2.29
Alpha and Omega Semiconductor	2	2	1	0	1.80

Applied Optoelectronics currently has a consensus target price of $35.60, suggesting a potential downside of 19.07%. Alpha and Omega Semiconductor has a consensus target price of $23.67, suggesting a potential upside of 14.50%. Given Alpha and Omega Semiconductor’s higher possible upside, analysts clearly believe Alpha and Omega Semiconductor is more favorable than Applied Optoelectronics.

Profitability

This table compares Applied Optoelectronics and Alpha and Omega Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Optoelectronics	-36.97%	-7.34%	-3.76%
Alpha and Omega Semiconductor	-15.06%	-3.78%	-3.03%

Volatility and Risk

Applied Optoelectronics has a beta of 3.32, indicating that its share price is 232% more volatile than the S&P 500. Comparatively, Alpha and Omega Semiconductor has a beta of 2.01, indicating that its share price is 101% more volatile than the S&P 500.

Valuation and Earnings

This table compares Applied Optoelectronics and Alpha and Omega Semiconductor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Optoelectronics	$249.37 million	12.04	-$186.73 million	($3.22)	-13.66
Alpha and Omega Semiconductor	$696.16 million	0.88	-$96.98 million	($3.47)	-5.96

Alpha and Omega Semiconductor has higher revenue and earnings than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than Alpha and Omega Semiconductor, indicating that it is currently the more affordable of the two stocks.

Summary

Alpha and Omega Semiconductor beats Applied Optoelectronics on 9 of the 14 factors compared between the two stocks.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers transient voltage suppressors, analog switch, and electromagnetic interference filter for notebooks, desktop PCs, tablets, flat panel displays, TVs, smart phones, and portable electronic devices; and 650V and 1200V SiC MOSFET. Alpha and Omega Semiconductor Limited was incorporated in 2000 and is headquartered in Sunnyvale, California.