Analyzing Netlist (OTCMKTS:NLST) and GSI Technology (NASDAQ:GSIT)

Netlist (OTCMKTS:NLST) and GSI Technology (NASDAQ:GSIT) 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 institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Netlist and GSI Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netlist	0	0	1	0	3.00
GSI Technology	0	0	0	0	0.00

Netlist currently has a consensus target price of $2.00, suggesting a potential upside of 185.71%. Given Netlist’s stronger consensus rating and higher possible upside, research analysts plainly believe Netlist is more favorable than GSI Technology.

Insider and Institutional Ownership

0.0% of Netlist shares are held by institutional investors. Comparatively, 33.2% of GSI Technology shares are held by institutional investors. 2.7% of Netlist shares are held by company insiders. Comparatively, 34.1% of GSI Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Netlist	-33.07%	N/A	-110.40%
GSI Technology	-51.85%	-46.88%	-32.42%

Volatility and Risk

Netlist has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, GSI Technology has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Valuation & Earnings

This table compares Netlist and GSI Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$147.10 million	1.39	-$53.87 million	($0.18)	-3.89
GSI Technology	$20.52 million	6.89	-$10.64 million	($0.42)	-11.57

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

Summary

Netlist beats GSI Technology on 8 of the 14 factors compared between the two stocks.

About Netlist

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 GSI Technology

GSI Technology, Inc. designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. It offers associative processing unit products, which are focuses on applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. The company also provides static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs, a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. In addition, it offers radiation-hardened and radiation-tolerant SRAMs for military/defense and aerospace applications, such as networking satellites and missiles. The company's products are used as components in its original equipment manufacturer customers' products, including routers, switches, and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; test and measurement applications consisting of high-speed testers; automotive applications comprising smart cruise control; medical applications, including ultrasound and CAT scan equipment; and audio/video processing. It markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.