Critical Review: Atomera (NASDAQ:ATOM) & Applied Optoelectronics (NASDAQ:AAOI)

Atomera (NASDAQ:ATOM) and Applied Optoelectronics (NASDAQ:AAOI) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Valuation & Earnings

This table compares Atomera and Applied Optoelectronics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atomera	$140,000.00	748.77	-$18.43 million	($0.67)	-4.97
Applied Optoelectronics	$249.37 million	6.37	-$186.73 million	($3.36)	-7.59

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

Risk & Volatility

Atomera has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 2.72, indicating that its stock price is 172% more volatile than the S&P 500.

Insider & Institutional Ownership

30.8% of Atomera shares are held by institutional investors. Comparatively, 61.7% of Applied Optoelectronics shares are held by institutional investors. 13.0% of Atomera shares are held by company insiders. Comparatively, 4.5% of Applied Optoelectronics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Atomera and Applied Optoelectronics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atomera	0	0	0	0	0.00
Applied Optoelectronics	0	2	4	0	2.67

Applied Optoelectronics has a consensus target price of $27.20, suggesting a potential upside of 6.70%. Given Applied Optoelectronics’ stronger consensus rating and higher possible upside, analysts clearly believe Applied Optoelectronics is more favorable than Atomera.

Profitability

This table compares Atomera and Applied Optoelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atomera	-15,555.37%	-90.84%	-78.02%
Applied Optoelectronics	-42.29%	-10.60%	-5.19%

Summary

Applied Optoelectronics beats Atomera on 9 of the 14 factors compared between the two stocks.

About Atomera

Atomera Incorporated engages in the developing, commercializing, and licensing proprietary processes and technologies for the semiconductor industry in North America and the Asia Pacific. The company's lead technology is the Mears Silicon Technology, a thin film of reengineered silicon that can be applied as a transistor channel enhancement to CMOS-type transistors. Its customers include foundries, integrated device manufacturers, fabless semiconductor manufacturers, original equipment manufacturers, and electronic design automation companies. The company was formerly known as Mears Technologies, Inc. and changed its name to Atomera Incorporated in January 2016. Atomera Incorporated was founded in 2001 and is headquartered in Los Gatos, California.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, 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.