Comparing Applied Optoelectronics (NASDAQ:AAOI) & Gilat Satellite Networks (NASDAQ:GILT)

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

Profitability

This table compares Gilat Satellite Networks and Applied Optoelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gilat Satellite Networks	6.34%	9.55%	6.53%
Applied Optoelectronics	-4.39%	-0.17%	-0.12%

Risk and Volatility

Gilat Satellite Networks has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 4.04, suggesting that its stock price is 304% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Gilat Satellite Networks and Applied Optoelectronics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gilat Satellite Networks	0	3	2	1	2.67
Applied Optoelectronics	1	1	4	0	2.50

Gilat Satellite Networks currently has a consensus target price of $12.15, suggesting a potential upside of 117.35%. Applied Optoelectronics has a consensus target price of $111.60, suggesting a potential upside of 123.69%. Given Applied Optoelectronics’ higher possible upside, analysts clearly believe Applied Optoelectronics is more favorable than Gilat Satellite Networks.

Valuation & Earnings

This table compares Gilat Satellite Networks and Applied Optoelectronics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gilat Satellite Networks	$451.66 million	0.91	$20.72 million	$0.41	13.63
Applied Optoelectronics	$455.71 million	9.94	-$38.23 million	($0.43)	-116.02

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

Insider & Institutional Ownership

35.7% of Gilat Satellite Networks shares are owned by institutional investors. Comparatively, 61.7% of Applied Optoelectronics shares are owned by institutional investors. 1.1% of Gilat Satellite Networks shares are owned by company insiders. Comparatively, 3.8% of Applied Optoelectronics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Gilat Satellite Networks beats Applied Optoelectronics on 8 of the 15 factors compared between the two stocks.

About Gilat Satellite Networks

Gilat Satellite Networks is an Israel-based provider of satellite communications technology and services. Founded in 1987, the company develops equipment and network solutions that enable broadband connectivity in areas where terrestrial networks are limited or unavailable. Its offerings include very small aperture terminal (VSAT) equipment, satellite modems, hubs, gateways and network management systems. Gilat also provides satellite communications solutions for cellular backhaul, enterprise and rural broadband, in-flight and maritime connectivity, and government and defense applications.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs and manufactures fiber-optic networking products used to transmit data over cable, telecommunications and data center networks. Its offerings include optical transceivers and other optical components and equipment. The company serves customers in markets including broadband access, telecommunications and data centers. Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics has operations in the United States and Asia and serves customers internationally.