Comparing ADTRAN (NASDAQ:ADTN) & Aviat Networks (NASDAQ:AVNW)

Aviat Networks (NASDAQ:AVNW) and ADTRAN (NASDAQ:ADTN) are both small-cap technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Aviat Networks and ADTRAN, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aviat Networks	2	0	8	0	2.60
ADTRAN	1	2	4	0	2.43

Aviat Networks currently has a consensus target price of $32.71, indicating a potential upside of 60.36%. ADTRAN has a consensus target price of $14.67, indicating a potential upside of 124.43%. Given ADTRAN’s higher possible upside, analysts plainly believe ADTRAN is more favorable than Aviat Networks.

Profitability

This table compares Aviat Networks and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aviat Networks	0.58%	5.85%	2.49%
ADTRAN	-2.29%	14.24%	1.66%

Volatility and Risk

Aviat Networks has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Institutional & Insider Ownership

78.6% of Aviat Networks shares are held by institutional investors. Comparatively, 80.6% of ADTRAN shares are held by institutional investors. 5.7% of Aviat Networks shares are held by insiders. Comparatively, 2.2% of ADTRAN shares are held 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.

Earnings & Valuation

This table compares Aviat Networks and ADTRAN”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aviat Networks	$439.68 million	0.60	$2.54 million	$0.19	107.37
ADTRAN	$1.08 billion	0.49	-$45.66 million	($0.28)	-23.34

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

Summary

Aviat Networks beats ADTRAN on 9 of the 14 factors compared between the two stocks.

About Aviat Networks

Aviat Networks, Inc. provides microwave networking and wireless access networking solutions in North America, Africa, the Middle East, Europe, Latin America, and the Asia Pacific. The company offers outdoor, indoor, and split-mount radios; microwave routers, switches, and trunking; and private LTE, virtual fiber, and element management products; and hosted software products, such as aviat design, frequency assurance software, and health assurance software. It also provides project services, which includes design and engineering, site and path surveys, assembly and integrations, project management, and install and commission; and managed services, such as network and interface monitoring, network health, onsite maintenance, and remote upgrades. In addition, the company offers support services, including extended warranty, warranty plus, provision support, and license key management, as well as instructor and virtual instructor led training, e-learning and certification services. It serves communications service providers and private network operators, including federal, state and local government agencies, transportation agencies, energy and utility companies, public safety agencies, and broadcast network operators. The company markets its products through a direct sales, service, and support organization; indirect sales channels comprising dealers, resellers, and sales representatives; and through online. Aviat Networks, Inc. company was incorporated in 2006 and is headquartered in Austin, Texas.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.