Reviewing Key Tronic (KTCC) and Stratasys (SSYS)

Key Tronic (NASDAQ: KTCC) and Stratasys (NASDAQ:SSYS) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Earnings and Valuation

This table compares Key Tronic and Stratasys’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Key Tronic $467.80 million 0.19 $5.61 million $0.51 16.27
Stratasys $668.36 million 1.62 -$38.27 million $0.13 154.92

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

Insider and Institutional Ownership

43.8% of Key Tronic shares are held by institutional investors. Comparatively, 75.1% of Stratasys shares are held by institutional investors. 7.2% of Key Tronic shares are held by company insiders. Comparatively, 4.3% of Stratasys shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Key Tronic and Stratasys, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Key Tronic 0 0 0 0 N/A
Stratasys 1 9 3 0 2.15

Stratasys has a consensus price target of $23.56, suggesting a potential upside of 16.96%. Given Stratasys’ higher possible upside, analysts clearly believe Stratasys is more favorable than Key Tronic.

Profitability

This table compares Key Tronic and Stratasys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Key Tronic 0.49% 2.80% 1.41%
Stratasys -5.94% 0.78% 0.65%

Risk and Volatility

Key Tronic has a beta of 0.14, meaning that its stock price is 86% less volatile than the S&P 500. Comparatively, Stratasys has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Stratasys beats Key Tronic on 7 of the 13 factors compared between the two stocks.

About Key Tronic

Key Tronic Corporation, doing business as KeyTronicEMS Co., provides electronic manufacturing services (EMS) and solutions to original equipment manufacturers in the United States and internationally. The company offers integrated electronic and mechanical engineering, assembly, sourcing and procurement, logistics, and new product testing services. Its services include product design; surface mount technologies and pin through hole capability for printed circuit board assembly; tool making; precision plastic molding; sheet metal fabrication; liquid injection molding; complex assembly; automated tape winding; prototype design; and full product assembly services. The company also manufactures keyboards and other input devices. It markets its products and services primarily through field sales people and distributors. Key Tronic Corporation was founded in 1969 and is headquartered in Spokane Valley, Washington.

About Stratasys

Stratasys Ltd. provides 3D printing and additive manufacturing solutions for individuals, small and large businesses, and enterprises. Its 3D printing systems utilize its fused deposition modeling (FDM) and inkjet-based PolyJet technologies to enable the production of prototypes, tools used for production and manufactured goods directly from 3D CAD files or other 3D content. The company offers entry-level desktop 3D printers to systems for rapid prototyping, and production systems for direct digital manufacturing. It also provides 3D printing consumable materials, including FDM cartridge-based materials, PolyJet cartridge-based materials, non-color digital materials, and color variations; and downloadable and cloud-based professional 3D printing workflow software, as well as suites of software with various 3D printing systems. In addition, the company offers customer support, basic warranty, and extended support programs; leases or rents 3D printers and 3D production systems; produces prototypes and end-use parts for customers from a customer-provided CAD file; and provides plastic and metal parts for rapid prototyping and production processes, as well as related professional services. Further, it operates Thingiverse, an online community for sharing downloadable, digital 3D designs; and GrabCAD Community, a resource of CAD models for mechanical engineers and designers. The company's products and services are primarily used in automotive, aerospace, medical, dental, jewelry, and education markets. Stratasys Ltd. sells its products through a network of resellers and independent sales agents worldwide. The company was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

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