AXT (NASDAQ:AXTI) and NVE (NASDAQ:NVEC) Head-To-Head Analysis

AXT (NASDAQ:AXTI) and NVE (NASDAQ:NVEC) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Risk and Volatility

AXT has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500. Comparatively, NVE has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Insider and Institutional Ownership

49.5% of AXT shares are owned by institutional investors. Comparatively, 66.0% of NVE shares are owned by institutional investors. 8.8% of AXT shares are owned by company insiders. Comparatively, 1.9% of NVE shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares AXT and NVE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AXT	-27.68%	-11.38%	-7.02%
NVE	57.71%	23.16%	22.52%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AXT and NVE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AXT	0	0	4	0	3.00
NVE	0	0	0	0	0.00

AXT currently has a consensus target price of $4.60, indicating a potential downside of 1.29%. Given AXT’s stronger consensus rating and higher probable upside, equities analysts clearly believe AXT is more favorable than NVE.

Valuation & Earnings

This table compares AXT and NVE”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AXT	$99.36 million	2.16	-$11.62 million	($0.55)	-8.47
NVE	$25.88 million	12.19	$15.06 million	$3.00	21.72

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

Summary

NVE beats AXT on 8 of the 14 factors compared between the two stocks.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.

About NVE

NVE Corporation develops and sells devices that use spintronics, a nanotechnology that relies on electron spin to acquire, store, and transmit information in the United States and internationally. The company manufactures spintronic products, including sensors and couplers for use in acquiring and transmitting data. Its products comprise standard sensors to detect the presence of a magnetic or metallic material to determine position, rotation, or speed for the factory automation market; and custom and medical sensors for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers for power conversion and industrial Internet of Things (IIoT) market; and DC-to-DC convertors for use in power conversion systems and industrial networks for the IIoT. In addition, it undertakes contracts for research and development, and licensing of spintronic magnetoresistive random access memory technology. NVE Corporation was founded in 1989 and is headquartered in Eden Prairie, Minnesota.