Analyzing Ichor (ICHR) and Oclaro (OCLR)

Ichor (NASDAQ: ICHR) and Oclaro (NASDAQ:OCLR) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Ichor and Oclaro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ichor 0 0 5 1 3.17
Oclaro 0 10 5 0 2.33

Ichor presently has a consensus price target of $41.00, indicating a potential upside of 80.78%. Oclaro has a consensus price target of $10.59, indicating a potential upside of 20.47%. Given Ichor’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ichor is more favorable than Oclaro.

Risk & Volatility

Ichor has a beta of 5.05, indicating that its share price is 405% more volatile than the S&P 500. Comparatively, Oclaro has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Insider & Institutional Ownership

82.2% of Ichor shares are held by institutional investors. Comparatively, 71.8% of Oclaro shares are held by institutional investors. 2.2% of Ichor shares are held by insiders. Comparatively, 2.0% of Oclaro shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Ichor and Oclaro’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ichor $655.89 million 0.89 $56.45 million $2.41 9.41
Oclaro $600.97 million 2.49 $127.85 million $0.75 11.71

Oclaro has lower revenue, but higher earnings than Ichor. Ichor is trading at a lower price-to-earnings ratio than Oclaro, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ichor and Oclaro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ichor 7.22% 35.86% 15.96%
Oclaro 19.60% 17.65% 13.93%

Summary

Ichor beats Oclaro on 10 of the 14 factors compared between the two stocks.

About Ichor

Ichor Holdings, Ltd. engages in the design, engineering, and manufacture of fluid delivery subsystems and components for semiconductor capital equipment in the United States, the United Kingdom, Singapore, Malaysia, and South Korea. It primarily offers gas and chemical delivery subsystems that are used in the manufacturing of semiconductor devices. The company's gas delivery subsystems deliver, monitor, and control gases used in semiconductor manufacturing processes, such as etch and deposition; and chemical delivery subsystems blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes comprising electroplating and cleaning. It also manufactures precision machined components, weldments, and proprietary products for use in fluid delivery systems. Ichor Holdings, Ltd. was founded in 1999 and is headquartered in Fremont, California.

About Oclaro

Oclaro, Inc. designs, manufactures, and markets optical components, modules, and subsystems for the long-haul, metro, and data center markets worldwide. The company's products generate, detect, combine, and separate light signals in optical communications networks. It offers client side transceivers, including pluggable transceivers; line side transceivers; tunable laser transmitters, such as discrete lasers and co-packaged laser modulators; lithium niobate modulators to manipulate the phase or the amplitude of an optical signal; transponder modules for transmitter and receiver functions; and discrete lasers and receivers for metro and long-haul applications. The company markets its products through direct sales force, as well as through sales representatives and resellers. It serves network equipment manufacturers of telecommunications and datacom systems, and hyperscale data center operators. The company was formerly known as Bookham, Inc. and changed its name to Oclaro, Inc. in April 2009. Oclaro, Inc. was founded in 1988 and is headquartered in San Jose, California.

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