Reviewing NETGEAR (NASDAQ:NTGR) and Xtera Communications (OTCMKTS:XCOMQ)

Xtera Communications (OTCMKTS:XCOMQ) and NETGEAR (NASDAQ:NTGR) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Valuation and Earnings

This table compares Xtera Communications and NETGEAR”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xtera Communications	N/A	N/A	N/A	N/A	N/A
NETGEAR	$696.38 million	0.94	-$17.92 million	($0.88)	-27.70

Xtera Communications has higher earnings, but lower revenue than NETGEAR.

Insider and Institutional Ownership

83.0% of NETGEAR shares are owned by institutional investors. 3.1% of NETGEAR shares are owned by 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 Xtera Communications and NETGEAR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xtera Communications	N/A	N/A	N/A
NETGEAR	-3.58%	-2.71%	-1.66%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Xtera Communications and NETGEAR, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xtera Communications	0	0	0	0	0.00
NETGEAR	1	1	2	0	2.25

NETGEAR has a consensus price target of $36.00, suggesting a potential upside of 47.66%. Given NETGEAR’s stronger consensus rating and higher possible upside, analysts clearly believe NETGEAR is more favorable than Xtera Communications.

Summary

NETGEAR beats Xtera Communications on 6 of the 9 factors compared between the two stocks.

About Xtera Communications

Xtera Communications, Inc. is in the process of liquidation. Previously, it provided Raman amplification enabled optical transport systems for terrestrial and submarine networks worldwide. The company was founded in 1998 and is headquartered in Allen, Texas. On February 21, 2017, the voluntary petition of Xtera Communications, Inc. for reorganization under Chapter 11 was converted to Chapter 7. It had filed for Chapter 11 bankruptcy on November 15, 2016.

About NETGEAR

NETGEAR, Inc. provides connectivity solutions the Americas; Europe, the Middle East, Africa; and the Asia Pacific. The company operates in two segments, Connected Home, and NETGEAR for Business. The Connected Home segment offers Wi-Fi routers and home Wi-Fi mesh systems, Wi-Fi hotspots, digital displays, broadband modems, Wi-Fi gateways, Wi-Fi range extenders, powerline adapters, and Wi-Fi network adapters; and provides value-added service offerings, including security and privacy, technical support, and parental controls. The NETGEAR for Business segment provides pro AV Solutions; pro routers; enterprise grade cloud managed or standalone access points; general purpose ethernet switches; NETGEAR Insight remote management software; and NETGEAR engage controller. It markets and sells its products through wholesale distributors, traditional and online retailers, direct market resellers, value-added resellers, and broadband service providers, as well as through its direct online store. The company was incorporated in 1996 and is headquartered in San Jose, California.