Neonode (NASDAQ:NEON) & The Descartes Systems Group (NASDAQ:DSGX) Critical Comparison

The Descartes Systems Group (NASDAQ:DSGX) and Neonode (NASDAQ:NEON) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for The Descartes Systems Group and Neonode, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Descartes Systems Group	0	5	6	1	2.67
Neonode	1	1	0	0	1.50

The Descartes Systems Group presently has a consensus target price of $121.70, indicating a potential upside of 45.04%. Neonode has a consensus target price of $6.00, indicating a potential upside of 161.44%. Given Neonode’s higher possible upside, analysts clearly believe Neonode is more favorable than The Descartes Systems Group.

Profitability

This table compares The Descartes Systems Group and Neonode’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Descartes Systems Group	21.64%	10.41%	8.81%
Neonode	-241.38%	-40.64%	-35.78%

Volatility & Risk

The Descartes Systems Group has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Neonode has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Earnings and Valuation

This table compares The Descartes Systems Group and Neonode”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Descartes Systems Group	$684.78 million	10.53	$143.27 million	$1.69	49.65
Neonode	$2.20 million	17.53	-$6.47 million	($0.32)	-7.17

The Descartes Systems Group has higher revenue and earnings than Neonode. Neonode is trading at a lower price-to-earnings ratio than The Descartes Systems Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.7% of The Descartes Systems Group shares are owned by institutional investors. Comparatively, 11.6% of Neonode shares are owned by institutional investors. 0.3% of The Descartes Systems Group shares are owned by insiders. Comparatively, 23.9% of Neonode shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

The Descartes Systems Group beats Neonode on 12 of the 15 factors compared between the two stocks.

About The Descartes Systems Group

The Descartes Systems Group Inc. provides cloud-based logistics and supply chain management solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as manufacturers, retailers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.