Nokia (NYSE:NOK) & Applied Optoelectronics (NASDAQ:AAOI) Critical Comparison

Applied Optoelectronics (NASDAQ:AAOI) and Nokia (NYSE:NOK) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Optoelectronics	-9.57%	-1.98%	-1.34%
Nokia	3.49%	9.83%	5.53%

Analyst Ratings

This is a summary of current ratings and target prices for Applied Optoelectronics and Nokia, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Optoelectronics	1	2	3	0	2.33
Nokia	2	3	12	0	2.59

Applied Optoelectronics presently has a consensus price target of $139.40, suggesting a potential upside of 32.31%. Nokia has a consensus price target of $13.83, suggesting a potential upside of 24.08%. Given Applied Optoelectronics’ higher possible upside, analysts plainly believe Applied Optoelectronics is more favorable than Nokia.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Optoelectronics	$455.71 million	19.55	-$38.23 million	($0.78)	-135.08
Nokia	$22.50 billion	2.84	$736.54 million	$0.14	79.61

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

Institutional and Insider Ownership

61.7% of Applied Optoelectronics shares are owned by institutional investors. Comparatively, 5.3% of Nokia shares are owned by institutional investors. 3.8% of Applied Optoelectronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Applied Optoelectronics has a beta of 3.79, suggesting that its share price is 279% more volatile than the S&P 500. Comparatively, Nokia has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Summary

Nokia 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 Nokia

Nokia Oyj provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. The company provides fixed networking solutions, such as fiber and copper-based access infrastructure, in-home Wi-Fi solutions, and cloud and virtualization services; IP networking solutions, including IP access, aggregation, and edge and core routing for residential, mobile, enterprise and cloud applications; optical networks solutions that provides optical transport networks for metro, regional, and long-haul applications, and subsea applications; and submarine networks for undersea cable transmission. It serves its products and services to communications service providers, webscales and hyperscalers, digital industries, and government. The company also offers mobile technology products and services for radio access networks and microwave radio links for transport networks, network management solutions, as well as network planning, optimization, network deployment, and technical support services. In addition, it offers cloud and network services, including core network solutions, such as voice and packet core; business applications, such as security, automation, and monetization; cloud and cognitive services; and enterprise solutions, including private wireless and industrial automation. Further, the company licenses intellectual property, including patents, technologies, and the Nokia brand. Nokia Oyj was founded in 1865 and is headquartered in Espoo, Finland.