Analyzing Marvell Technology Group (NASDAQ:MRVL) & Applied Optoelectronics (NASDAQ:AAOI)

Marvell Technology Group (NASDAQ:MRVL) and Applied Optoelectronics (NASDAQ:AAOI) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Risk & Volatility

Marvell Technology Group has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Marvell Technology Group and Applied Optoelectronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marvell Technology Group 0 4 22 0 2.85
Applied Optoelectronics 1 5 1 0 2.00

Marvell Technology Group currently has a consensus target price of $49.96, suggesting a potential downside of 0.80%. Applied Optoelectronics has a consensus target price of $12.70, suggesting a potential upside of 49.76%. Given Applied Optoelectronics’ higher possible upside, analysts plainly believe Applied Optoelectronics is more favorable than Marvell Technology Group.

Insider and Institutional Ownership

87.3% of Marvell Technology Group shares are held by institutional investors. Comparatively, 47.5% of Applied Optoelectronics shares are held by institutional investors. 0.3% of Marvell Technology Group shares are held by company insiders. Comparatively, 7.2% of Applied Optoelectronics 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.

Earnings & Valuation

This table compares Marvell Technology Group and Applied Optoelectronics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marvell Technology Group $2.70 billion 12.61 $1.58 billion $0.32 157.38
Applied Optoelectronics $190.87 million 1.19 -$66.05 million ($1.45) -5.85

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

Profitability

This table compares Marvell Technology Group and Applied Optoelectronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marvell Technology Group 51.19% 3.76% 2.91%
Applied Optoelectronics -34.83% -11.67% -6.48%

Summary

Marvell Technology Group beats Applied Optoelectronics on 11 of the 14 factors compared between the two stocks.

About Marvell Technology Group

Marvell Technology Group Ltd., together with its subsidiaries, designs, develops, and sells analog, mixed-signal, digital signal processing, and embedded and standalone integrated circuits. It offers a portfolio of Ethernet solutions, including controllers, network adapters, physical transceivers, and switches; single or multiple core processors; application specific integrated circuits; and printer SoC products and application processors. The company also provides a range of storage products comprising storage controllers for hard disk drives (HDD) and solid-state drives that support various host system interfaces consisting of serial attached SCSI (SAS), serial advanced technology attachment (SATA), peripheral component interconnect express, non-volatile memory express (NVMe), and NVMe over fabrics; and fiber channel products, including host bus adapters, and controllers for server and storage system connectivity. It has operations in the United States, China, Malaysia, the Philippines, Thailand, Singapore, India, Israel, Japan, South Korea, Taiwan, and Vietnam. Marvell Technology Group Ltd. was incorporated in 1995 and is headquartered in Hamilton, Bermuda.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, subassemblies, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to internet data center operators, cable television and telecom equipment manufacturers, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

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