Reviewing Qualstar (OTCMKTS:QBAK) and GSI Technology (NASDAQ:GSIT)

GSI Technology (NASDAQ:GSIT) and Qualstar (OTCMKTS:QBAK) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Volatility & Risk

GSI Technology has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Qualstar has a beta of -0.26, meaning that its stock price is 126% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for GSI Technology and Qualstar, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GSI Technology	1	0	0	0	1.00
Qualstar	0	0	0	0	0.00

Earnings and Valuation

This table compares GSI Technology and Qualstar”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GSI Technology	$20.52 million	13.70	-$10.64 million	($0.37)	-21.00
Qualstar	$8.04 million	3.16	-$470,000.00	$0.41	44.88

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

Institutional and Insider Ownership

33.2% of GSI Technology shares are owned by institutional investors. 25.4% of GSI Technology shares are owned by company insiders. Comparatively, 36.0% of Qualstar shares are owned by company 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.

Profitability

This table compares GSI Technology and Qualstar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GSI Technology	-43.15%	-22.69%	-17.44%
Qualstar	8.35%	N/A	N/A

Summary

Qualstar beats GSI Technology on 7 of the 12 factors compared between the two stocks.

About GSI Technology

GSI Technology, Inc. designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. It offers associative processing unit products, which are focuses on applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. The company also provides static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs, a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. In addition, it offers radiation-hardened and radiation-tolerant SRAMs for military/defense and aerospace applications, such as networking satellites and missiles. The company's products are used as components in its original equipment manufacturer customers' products, including routers, switches, and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; test and measurement applications consisting of high-speed testers; automotive applications comprising smart cruise control; medical applications, including ultrasound and CAT scan equipment; and audio/video processing. It markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.

About Qualstar

Qualstar Corporation engages in power solutions and data storage systems businesses worldwide. The company operates through two segments, Power Solutions and Data Storage Systems. It provides data storage systems under the Qualstar brand and power solutions under the N2Power brand. The company designs, manufactures, and sells switching power supplies that are used to convert AC line voltage to DC voltages; or DC voltages to other DC voltages for use in various electronic equipment, such as telecommunications equipment, machine tools, routers, switches, wireless systems, and gaming devices. It also supports and sells data storage devices used to store, retrieve, and manage electronic data primarily in network computing environments. The company serves original equipment manufacturers, information technology departments, and lower and middle market companies through distributor and reseller network, distributors, and independent outside sales representatives. Qualstar Corporation was founded in 1984 and is based in Camarillo, California.