Acacia Communications (NASDAQ:ACIA) and Smart Global (NASDAQ:SGH) Head to Head Analysis

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Acacia Communications (NASDAQ:ACIA) and Smart Global (NASDAQ:SGH) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

79.0% of Acacia Communications shares are held by institutional investors. Comparatively, 93.7% of Smart Global shares are held by institutional investors. 9.3% of Acacia Communications shares are held by company insiders. Comparatively, 4.2% of Smart Global shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Acacia Communications and Smart Global’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acacia Communications $339.89 million 8.07 $4.92 million $0.15 443.27
Smart Global $1.21 billion 0.57 $51.33 million $2.56 11.38

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

Analyst Recommendations

This is a summary of current ratings for Acacia Communications and Smart Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acacia Communications 2 10 2 0 2.00
Smart Global 0 0 5 0 3.00

Acacia Communications presently has a consensus target price of $58.64, suggesting a potential downside of 11.81%. Smart Global has a consensus target price of $37.00, suggesting a potential upside of 26.97%. Given Smart Global’s stronger consensus rating and higher probable upside, analysts plainly believe Smart Global is more favorable than Acacia Communications.

Profitability

This table compares Acacia Communications and Smart Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acacia Communications 6.58% 8.57% 6.89%
Smart Global 4.24% 25.15% 8.57%

Risk & Volatility

Acacia Communications has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500. Comparatively, Smart Global has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Summary

Smart Global beats Acacia Communications on 9 of the 14 factors compared between the two stocks.

About Acacia Communications

Acacia Communications, Inc. develops, manufactures, and sells high-speed coherent optical interconnect products in the United States, China, Germany, Thailand, and internationally. The company offers embedded and pluggable module products consisting of optical interconnect modules with transmission speeds ranging from 100 to 1,200 gigabits per second for use in long-haul, metro, and inter-data center markets. It also provides semiconductor products, such as low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits that are integrated into embedded and pluggable modules. The company sells its products through a direct sales force to network equipment manufacturers, network operators, and cloud service providers. Acacia Communications, Inc. was founded in 2009 and is headquartered in Maynard, Massachusetts.

About Smart Global

SMART Global Holdings, Inc. designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements. It also provides flash memory, USB, and serial advanced technology attachment products primarily for use in communications equipment, printers, servers and storage products, switches, and routers; and aerospace, automotive, and defense industries, as well as industrial applications. In addition, the company provides networking, storage, and compute solutions, as well as HPC software to manage and use on premise and cloud computing clusters. Further, it offers supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. SMART Global Holdings, Inc. sells its products to OEMs through direct sales force and independent sales representatives in North America, Latin America, Asia, and Europe. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

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