NETGEAR (NASDAQ:NTGR – Get Free Report) and Lantronix (NASDAQ:LTRX – Get Free Report) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Profitability
This table compares NETGEAR and Lantronix’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NETGEAR | 9.13% | -3.24% | -2.09% |
| Lantronix | -9.25% | -12.77% | -7.48% |
Valuation & Earnings
This table compares NETGEAR and Lantronix”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NETGEAR | $673.76 million | 1.17 | $12.36 million | $2.16 | 12.58 |
| Lantronix | $122.92 million | 1.57 | -$11.37 million | ($0.30) | -16.57 |
NETGEAR has higher revenue and earnings than Lantronix. Lantronix is trading at a lower price-to-earnings ratio than NETGEAR, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for NETGEAR and Lantronix, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NETGEAR | 0 | 0 | 2 | 0 | 3.00 |
| Lantronix | 0 | 0 | 3 | 0 | 3.00 |
NETGEAR currently has a consensus target price of $33.00, indicating a potential upside of 21.46%. Lantronix has a consensus target price of $4.17, indicating a potential downside of 16.16%. Given NETGEAR’s higher possible upside, analysts clearly believe NETGEAR is more favorable than Lantronix.
Volatility & Risk
NETGEAR has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Lantronix has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.
Insider & Institutional Ownership
83.0% of NETGEAR shares are owned by institutional investors. Comparatively, 39.4% of Lantronix shares are owned by institutional investors. 2.3% of NETGEAR shares are owned by insiders. Comparatively, 1.6% of Lantronix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
NETGEAR beats Lantronix on 10 of the 13 factors compared between the two stocks.
About NETGEAR
NETGEAR, Inc. provides connectivity solutions the Americas; Europe, the Middle East, Africa; and the Asia Pacific. The company operates in two segments, Connected Home, and NETGEAR for Business. The Connected Home segment offers Wi-Fi routers and home Wi-Fi mesh systems, Wi-Fi hotspots, digital displays, broadband modems, Wi-Fi gateways, Wi-Fi range extenders, powerline adapters, and Wi-Fi network adapters; and provides value-added service offerings, including security and privacy, technical support, and parental controls. The NETGEAR for Business segment provides pro AV Solutions; pro routers; enterprise grade cloud managed or standalone access points; general purpose ethernet switches; NETGEAR Insight remote management software; and NETGEAR engage controller. It markets and sells its products through wholesale distributors, traditional and online retailers, direct market resellers, value-added resellers, and broadband service providers, as well as through its direct online store. The company was incorporated in 1996 and is headquartered in San Jose, California.
About Lantronix
Lantronix, Inc. provides solutions for video surveillance, infotainment systems, and intelligent substations infrastructure in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT System Solutions, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; Embedded IoT Modules, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and Software and Engineering Services offers SaaS platform that enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login. It also offers telematics devices, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management; network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development. In addition, the company provides console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms; and hardware engineering, software engineering, and mechanical engineering, rapid prototyping and quality assurance engineering services. Lantronix, Inc. was incorporated in 1989 and is based in Irvine, California.
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