Head to Head Review: Mellanox Technologies (MLNX) and SuperCom (SPCB)

Mellanox Technologies (NASDAQ:MLNX) and SuperCom (NASDAQ:SPCB) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Analyst Ratings

This is a summary of recent ratings for Mellanox Technologies and SuperCom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mellanox Technologies 0 3 10 0 2.77
SuperCom 0 0 1 0 3.00

Mellanox Technologies currently has a consensus target price of $102.36, suggesting a potential upside of 44.01%. SuperCom has a consensus target price of $5.00, suggesting a potential upside of 194.12%. Given SuperCom’s stronger consensus rating and higher possible upside, analysts clearly believe SuperCom is more favorable than Mellanox Technologies.

Profitability

This table compares Mellanox Technologies and SuperCom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mellanox Technologies 5.61% 12.26% 9.34%
SuperCom -13.75% 4.20% 2.59%

Volatility and Risk

Mellanox Technologies has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, SuperCom has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500.

Institutional and Insider Ownership

75.5% of Mellanox Technologies shares are held by institutional investors. Comparatively, 22.4% of SuperCom shares are held by institutional investors. 4.2% of Mellanox Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Mellanox Technologies and SuperCom’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mellanox Technologies $863.89 million 4.36 -$19.42 million $0.91 78.11
SuperCom $33.26 million 0.76 -$6.66 million ($0.14) -12.14

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

Summary

Mellanox Technologies beats SuperCom on 11 of the 14 factors compared between the two stocks.

Mellanox Technologies Company Profile

Mellanox Technologies, Ltd., a fabless semiconductor company, designs, manufactures, and sells interconnect products and solutions worldwide. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment, and other embedded systems. The company offers InfiniBand solutions, including switch and gateway integrated circuits (ICs), adapter cards, cables, modules, and software, as well as switch, gateway, and long-haul systems; Ethernet solutions, such as Ethernet switch products and Ethernet adapters for use in enterprise data center, high-performance computing, embedded environments, hyperscale, Web 2.0, and cloud data centers. It also provides adapters to server, storage, communications infrastructure, and embedded systems original equipment manufacturers (OEMs) as ICs or standard card form factors with PCI express interfaces; and switch ICs and systems to server, storage, communications infrastructure, and embedded systems OEMs to create switching equipment. In addition, the company supports server operating systems, including Linux, Windows, AIX, HPUX, Solaris, and VxWorks. It sells its products through its direct sales force, a network of sales representatives, and independent distributors. Mellanox Technologies, Ltd. was founded in 1999 and is headquartered in Sunnyvale, California.

SuperCom Company Profile

SuperCom Ltd. provides digital identity, Internet of Things and connectivity, and cyber security products and solutions to governments, and private and public organizations worldwide. The company offers MAGNA, a common platform for ID registries, e-passports, biometric visas, automated fingerprint identification systems, digitized driver's licenses, and electronic voter registration and election management. Its PureRF suite is a solution based on radio-frequency identification (RFID) tag technology to identify, locate, track, monitor, count, and protect people and objects. The company's PureRF suite comprises PureRF tags, hands-free long-range RFID asset and Vehicle tags, PureRF readers, PureRF activators, and PureRF initializers. It also provides house arrest monitoring systems, PureTag RF bracelets, PureCom RF base stations, GPS offender tracking systems, PureTrack smartphone device, PureBeacon, PureMonitor offender electronic monitoring software, inmate monitoring systems, DoorGuard tracking station, and personnel tags. In addition, the company offers domestic violence victim protection systems; SuperPay, a mobile payment hybrid suite; and PowaPOS, an integrated design incorporating retail peripherals. Further, it provides Safend's Encryption Suite that protects the organization's sensitive data; and designs solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses, and connected events. The company serves healthcare and homecare, security and safety, community public safety, law enforcement, electronic monitoring, livestock monitoring, and building and access automation industries. SuperCom Ltd. sells its systems and products through local representatives, subsidiaries, and distribution channels, as well as independent representatives and resellers. The company was formerly known as Vuance Ltd. and changed its name to SuperCom Ltd. in January 2013. SuperCom Ltd. was founded in 1988 and is based in Herzliya, Israel.

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