Contrasting Extreme Networks (NASDAQ:EXTR) & Applied Optoelectronics (NASDAQ:AAOI)

Applied Optoelectronics (NASDAQ:AAOI) and Extreme Networks (NASDAQ:EXTR) are both mid-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Applied Optoelectronics and Extreme Networks”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Optoelectronics	$455.71 million	18.42	-$38.23 million	($0.78)	-127.26
Extreme Networks	$1.28 billion	2.21	$42.12 million	$0.31	69.19

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

Volatility and Risk

Applied Optoelectronics has a beta of 3.79, indicating that its share price is 279% more volatile than the S&P 500. Comparatively, Extreme Networks has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Profitability

This table compares Applied Optoelectronics and Extreme Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Optoelectronics	-9.57%	-1.98%	-1.34%
Extreme Networks	3.28%	88.88%	6.32%

Analyst Ratings

This is a summary of current ratings and price targets for Applied Optoelectronics and Extreme Networks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Optoelectronics	1	2	3	0	2.33
Extreme Networks	0	2	7	0	2.78

Applied Optoelectronics currently has a consensus target price of $139.40, suggesting a potential upside of 40.44%. Extreme Networks has a consensus target price of $32.25, suggesting a potential upside of 50.35%. Given Extreme Networks’ stronger consensus rating and higher possible upside, analysts clearly believe Extreme Networks is more favorable than Applied Optoelectronics.

Insider & Institutional Ownership

61.7% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 91.0% of Extreme Networks shares are held by institutional investors. 3.8% of Applied Optoelectronics shares are held by insiders. Comparatively, 3.2% of Extreme Networks shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Extreme Networks beats Applied Optoelectronics on 11 of the 14 factors compared between the two stocks.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.

About Extreme Networks

Extreme Networks, Inc. delivers cloud-driven networking solutions that leverage the powers of machine learning, artificial intelligence, analytics, and automation.
The company designs, develops, and manufactures wired and wireless network infrastructure equipment and develops the software for network management, policy, analytics, security, and access controls. Over 50,000 customers globally trust their end-to-end, cloud-driven networking solutions and rely on our top-rated services and support to accelerate their digital transformation efforts.