Microsoft (NASDAQ:MSFT – Get Free Report) and Neonode (NASDAQ:NEON – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
Valuation & Earnings
This table compares Microsoft and Neonode”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Microsoft | $281.72 billion | 13.95 | $101.83 billion | $13.64 | 38.75 |
| Neonode | $3.11 million | 20.34 | -$6.47 million | ($0.71) | -5.31 |
Risk & Volatility
Microsoft has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Neonode has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.
Institutional & Insider Ownership
71.1% of Microsoft shares are held by institutional investors. Comparatively, 11.6% of Neonode shares are held by institutional investors. 0.0% of Microsoft shares are held by insiders. Comparatively, 23.9% of Neonode shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Ratings
This is a summary of current ratings and recommmendations for Microsoft and Neonode, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Microsoft | 0 | 2 | 31 | 1 | 2.97 |
| Neonode | 1 | 1 | 0 | 0 | 1.50 |
Microsoft currently has a consensus price target of $618.47, indicating a potential upside of 17.01%. Neonode has a consensus price target of $6.00, indicating a potential upside of 59.15%. Given Neonode’s higher possible upside, analysts plainly believe Neonode is more favorable than Microsoft.
Profitability
This table compares Microsoft and Neonode’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Microsoft | 36.15% | 32.44% | 18.20% |
| Neonode | -241.38% | -40.64% | -35.78% |
Summary
Microsoft beats Neonode on 12 of the 15 factors compared between the two stocks.
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services. This segment also provides LinkedIn; and dynamics business solutions, including Dynamics 365, a set of intelligent, cloud-based applications across ERP, CRM, power apps, and power automate; and on-premises ERP and CRM applications. The Intelligent Cloud segment offers server products and cloud services, such as azure and other cloud services; SQL and windows server, visual studio, system center, and related client access licenses, as well as nuance and GitHub; and enterprise services including enterprise support services, industry solutions, and nuance professional services. The More Personal Computing segment offers Windows, including windows OEM licensing and other non-volume licensing of the Windows operating system; Windows commercial comprising volume licensing of the Windows operating system, windows cloud services, and other Windows commercial offerings; patent licensing; and windows Internet of Things; and devices, such as surface, HoloLens, and PC accessories. Additionally, this segment provides gaming, which includes Xbox hardware and content, and first- and third-party content; Xbox game pass and other subscriptions, cloud gaming, advertising, third-party disc royalties, and other cloud services; and search and news advertising, which includes Bing, Microsoft News and Edge, and third-party affiliates. The company sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online, and retail stores. The company was founded in 1975 and is headquartered in Redmond, Washington.
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.
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