Canaan (NASDAQ:CAN) and Netlist (OTCMKTS:NLST) Financial Analysis

Netlist (OTCMKTS:NLSTGet Free Report) and Canaan (NASDAQ:CANGet Free Report) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Netlist and Canaan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Netlist -64.15% -268.19% -97.51%
Canaan -192.95% -75.57% -57.68%

Volatility and Risk

Netlist has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.11, suggesting that its stock price is 211% more volatile than the S&P 500.

Institutional and Insider Ownership

0.0% of Netlist shares are owned by institutional investors. Comparatively, 70.1% of Canaan shares are owned by institutional investors. 2.7% of Netlist shares are owned by company insiders. Comparatively, 0.3% of Canaan shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Netlist and Canaan’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Netlist $69.21 million 5.15 -$60.40 million ($0.25) -5.57
Canaan $211.48 million 1.47 -$414.15 million ($2.05) -0.54

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Netlist and Canaan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Netlist 0 0 0 0 N/A
Canaan 0 0 2 0 3.00

Canaan has a consensus price target of $4.25, indicating a potential upside of 282.88%. Given Canaan’s higher probable upside, analysts plainly believe Canaan is more favorable than Netlist.

Summary

Canaan beats Netlist on 7 of the 12 factors compared between the two stocks.

About Netlist

(Get Free Report)

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

About Canaan

(Get Free Report)

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.

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