Critical Survey: AEye (NASDAQ:LIDR) versus ScanSource (NASDAQ:SCSC)

ScanSource (NASDAQ:SCSC) and AEye (NASDAQ:LIDR) are both small-cap technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional and Insider Ownership

97.9% of ScanSource shares are owned by institutional investors. Comparatively, 21.6% of AEye shares are owned by institutional investors. 3.2% of ScanSource shares are owned by company insiders. Comparatively, 11.9% of AEye shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares ScanSource and AEye”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ScanSource	$3.23 billion	0.36	$78.87 million	$3.66	15.93
AEye	$230,000.00	245.52	-$33.96 million	($0.87)	-1.39

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

Profitability

This table compares ScanSource and AEye’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ScanSource	2.44%	10.10%	5.11%
AEye	-7,786.44%	-42.98%	-38.52%

Volatility and Risk

ScanSource has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, AEye has a beta of 2.83, suggesting that its share price is 183% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for ScanSource and AEye, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ScanSource	0	3	0	1	2.50
AEye	1	0	1	0	2.00

ScanSource presently has a consensus target price of $43.00, suggesting a potential downside of 26.24%. AEye has a consensus target price of $3.50, suggesting a potential upside of 189.26%. Given AEye’s higher probable upside, analysts plainly believe AEye is more favorable than ScanSource.

Summary

ScanSource beats AEye on 10 of the 15 factors compared between the two stocks.

About ScanSource

ScanSource, Inc. engages in the distribution of technology products and solutions in the United States, Canada, and Brazil. It operates through two segments, Specialty Technology Solutions and Modern Communications & Cloud. The Specialty Technology Solutions segment provides a portfolio of solutions primarily for enterprise mobile computing, data capture, barcode printing, point of sale (POS), payments, networking, electronic physical security, cyber security, and other technologies. This segment offers data capture and POS solutions to automate the collection, processing, and communication of information for commercial and industrial applications, including retail sales, distribution, shipping, inventory control, materials handling, warehouse management, and health care applications. It also provides electronic physical security products, such as identification, access control, video surveillance, and intrusion-related devices; networking products comprising wireless and networking infrastructure products; other software-as-a-service (SaaS) products; and engages in hardware rental activities. The Modern Communications & Cloud segment offers a portfolio of solutions primarily for communications technologies and services comprising voice, video conferencing, wireless, data networking, cybersecurity, cable, unified communications and collaboration, cloud, and technology services, as well as IP networks and other solutions for various vertical markets, such as education, healthcare, and government. The company serves manufacturing, warehouse and distribution, retail and e-commerce, hospitality, transportation and logistics, government, education and healthcare, and other industries. ScanSource, Inc. was incorporated in 1992 and is headquartered in Greenville, South Carolina.

About AEye

AEye, Inc., together with its subsidiaries, provides lidar systems for vehicle autonomy, advanced driver-assistance systems, and robotic vision applications in the United States, Europe, and Asia-Pacific. It offers 4Sight intelligent sensing lidar platform, including 4Sight at Design, Triggered 4Sight, Responsive 4Sight, and Predictive 4Sight; and 4Sight for automotive and industrial market. The company was formerly known as CF Finance Acquisition Corp. III and changed its name to AEye, Inc. in August 2021. AEye, Inc. was founded in 2013 and is headquartered in Dublin, California.