Ooma (OOMA) and Applied Optoelectronics (NASDAQ:AAOI) Head-To-Head Comparison

Applied Optoelectronics (NASDAQ: AAOI) and Ooma (NYSE:OOMA) are both small-cap technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Earnings & Valuation

This table compares Applied Optoelectronics and Ooma’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Applied Optoelectronics $260.71 million 3.27 $31.23 million $4.19 10.51
Ooma $104.52 million 1.96 -$12.94 million ($0.72) -15.56

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

Profitability

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

Net Margins Return on Equity Return on Assets
Applied Optoelectronics 21.29% 32.35% 23.92%
Ooma -11.65% -32.00% -17.20%

Insider & Institutional Ownership

76.7% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 75.1% of Ooma shares are held by institutional investors. 8.2% of Applied Optoelectronics shares are held by insiders. Comparatively, 11.4% of Ooma shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Applied Optoelectronics and Ooma, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 3 1 4 2 2.50
Ooma 1 2 2 0 2.20

Applied Optoelectronics presently has a consensus target price of $60.75, indicating a potential upside of 37.91%. Ooma has a consensus target price of $12.67, indicating a potential upside of 13.10%. Given Applied Optoelectronics’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Applied Optoelectronics is more favorable than Ooma.

Volatility and Risk

Applied Optoelectronics has a beta of 2.88, meaning that its share price is 188% more volatile than the S&P 500. Comparatively, Ooma has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500.

Summary

Applied Optoelectronics beats Ooma on 13 of the 14 factors compared between the two stocks.

About Applied Optoelectronics

Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.

About Ooma

Ooma, Inc. is a United States-based company, which offers Ooma, a communications platform for small businesses and consumers. Ooma serves as a communications hub, which offers cloud-based telephony, Internet security, home monitoring and other connected services. Ooma combines PureVoice high definition (HD) call quality features with mobile applications anytime, anywhere calling. Ooma is a full router capable of prioritizing voice data and directing traffic to ensure reliable phone service. Its enterprise-grade phone service built for small business includes features, such as calling features, including unlimited calling in United States and Canada, 911 service and toll-free numbers available; office features, including virtual receptionist, extension dialing and voicemail; mobility features, including call forwarding, voicemail forwarding and multi-ring, and one-touch Internet protocol (IP) phone features, including three way conference, transfer calls and call on hold.

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