Contrasting Arista Networks (ANET) & XG Technology (XGTI)

Arista Networks (NYSE: ANET) and XG Technology (NASDAQ:XGTI) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

58.2% of Arista Networks shares are held by institutional investors. Comparatively, 2.3% of XG Technology shares are held by institutional investors. 28.1% of Arista Networks shares are held by insiders. Comparatively, 2.8% of XG Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Arista Networks and XG Technology’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arista Networks $1.13 billion 14.48 $184.18 million $4.84 46.22
XG Technology $6.57 million 3.71 -$20.90 million ($155.86) -0.01

Arista Networks has higher revenue and earnings than XG Technology. XG Technology is trading at a lower price-to-earnings ratio than Arista Networks, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Arista Networks and XG Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arista Networks 25.10% 24.76% 15.89%
XG Technology -20.76% -26.16% -15.69%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Arista Networks and XG Technology, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arista Networks 0 13 17 0 2.57
XG Technology 0 0 2 0 3.00

Arista Networks currently has a consensus price target of $195.59, indicating a potential downside of 12.56%. XG Technology has a consensus price target of $3.75, indicating a potential upside of 125.90%. Given XG Technology’s stronger consensus rating and higher possible upside, analysts clearly believe XG Technology is more favorable than Arista Networks.

Volatility and Risk

Arista Networks has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, XG Technology has a beta of -0.72, suggesting that its stock price is 172% less volatile than the S&P 500.

Summary

Arista Networks beats XG Technology on 11 of the 13 factors compared between the two stocks.

Arista Networks Company Profile

Arista Networks, Inc. is a supplier of cloud networking solutions that use software innovations to address the needs of Internet companies, cloud service providers and data centers for enterprise support. It develops, markets and sells cloud networking solutions, which consist of its Gigabit Ethernet switches and related software. The Company’s cloud networking solutions consist of its Extensible Operating System (EOS), a set of network applications and its Ethernet switching and routing platforms. The programmability of EOS has allowed it to create a set of software applications that address the requirements of cloud networking, including workflow automation, network visibility and analytics, and has also allowed it to integrate with a range of third-party applications for virtualization, management, automation, orchestration and network services. EOS supports cloud and virtualization solutions, including VMware NSX, Microsoft System Center and other cloud management frameworks.

XG Technology Company Profile

xG Technology, Inc. develops a portfolio of intellectual property, which is embedded in its software algorithms that offer cognitive interference mitigation and spectrum access solutions for a range of applications using commercial off the shelf devices. The Company is a provider of wireless video solutions to broadcast, law enforcement and defense markets, and private mobile broadband networks for use in a range of environments. The Company markets its technology solutions across three business units: Integrated Microwave Technologies (IMT), Vislink Communication Systems and xMax. The Company offers a range of frequency-agnostic cognitive radio solutions. It focuses on various industries across the world, such as telecommunications, cable, defense and public safety, municipal governments, critical infrastructure and markets ranging from rural to urban areas and expeditionary deployments.

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