Knowles (NYSE:KN) & LRAD (NYSE:GNSS) Financial Survey

Knowles (NYSE:KN) and LRAD (NASDAQ:GNSS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings for Knowles and LRAD, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knowles 1 2 3 0 2.33
LRAD 0 0 0 0 N/A

Knowles presently has a consensus target price of $20.83, suggesting a potential upside of 0.50%. Given Knowles’ higher probable upside, equities analysts clearly believe Knowles is more favorable than LRAD.

Insider and Institutional Ownership

99.0% of Knowles shares are held by institutional investors. Comparatively, 50.2% of LRAD shares are held by institutional investors. 3.7% of Knowles shares are held by insiders. Comparatively, 3.8% of LRAD 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.

Profitability

This table compares Knowles and LRAD’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knowles 12.81% 6.59% 5.13%
LRAD 7.53% 8.14% 6.54%

Volatility and Risk

Knowles has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, LRAD has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500.

Earnings & Valuation

This table compares Knowles and LRAD’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knowles $826.90 million 2.29 $67.70 million $0.80 25.91
LRAD $36.98 million 3.02 $2.79 million $0.08 42.25

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

Summary

Knowles beats LRAD on 8 of the 13 factors compared between the two stocks.

About Knowles

Knowles Corporation designs, manufactures, and sells micro-acoustic, audio processing, and precision device solutions for the mobile consumer electronics, communications, medical, defense, aerospace, and industrial markets worldwide. It operates in two segments, Audio and Precision Devices (PD). The Audio segment designs and manufactures audio products, including microphones and balanced armature speakers, audio processors, and software and algorithms used in applications that serve the mobile, ear, and Internet of Things markets. It also provides analog and digital micro-electro-mechanical systems, microphones, electret condenser microphones, smart microphones, ultrasonic sensors, acoustic processors, and balanced armature speakers, as well as transducer products used primarily in hearing health and headset applications. The PD segment designs and delivers engineered capacitors and radio frequency devices for applications, such as power supplies, radar, medical implants, and satellites for the industrial, defense, aerospace, medical, telecommunications, and automotive markets. The company also provides single layer electronic components to the telecommunication, fiber optics, defense, and aerospace markets. It sells its products directly to original equipment manufacturers and to their contract manufacturers and suppliers, as well as through distributors. The company was founded in 1946 and is headquartered in Itasca, Illinois.

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