Critical Analysis: LightPath Technologies (NASDAQ:LPTH) vs. Data I/O (NASDAQ:DAIO)

Data I/O (NASDAQ:DAIO) and LightPath Technologies (NASDAQ:LPTH) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Earnings and Valuation

This table compares Data I/O and LightPath Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Data I/O	$22.70 million	1.19	-$3.09 million	($0.40)	-7.18
LightPath Technologies	$37.20 million	17.24	-$14.87 million	($0.52)	-21.38

Data I/O has higher earnings, but lower revenue than LightPath Technologies. LightPath Technologies is trading at a lower price-to-earnings ratio than Data I/O, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Data I/O has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, LightPath Technologies has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Data I/O and LightPath Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Data I/O	-16.16%	-21.44%	-15.24%
LightPath Technologies	-43.41%	-32.64%	-10.70%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Data I/O and LightPath Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Data I/O	1	1	2	1	2.60
LightPath Technologies	1	1	4	1	2.71

Data I/O currently has a consensus target price of $5.11, indicating a potential upside of 78.05%. LightPath Technologies has a consensus target price of $12.10, indicating a potential upside of 8.85%. Given Data I/O’s higher probable upside, analysts clearly believe Data I/O is more favorable than LightPath Technologies.

Institutional & Insider Ownership

37.0% of Data I/O shares are held by institutional investors. Comparatively, 56.3% of LightPath Technologies shares are held by institutional investors. 2.6% of Data I/O shares are held by insiders. Comparatively, 24.8% of LightPath Technologies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

About Data I/O

Data I/O Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally. Its programming system products are used to program integrated circuits (ICs) with the specific data for the ICs. The company offers PSV handlers off-line automated programming systems, such as PSV2800 automated programming system which focuses on high-volume manufacturing in a lower cost platform; PSV7000 automated programming system for security deployment upgrades; PSV5000 automated programming system that combines mid-range capacity and supports security deployment; and PSV3500 automated programming system which provides basic programming needs. It also provides SentriX security deployment system; and LumenX and non-automated FlashPAK III programming systems. In addition, the company offers hardware support, system installation and repair, and device programming services. It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, internet of things, and industrial, as well as electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors. Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

About LightPath Technologies

LightPath Technologies, Inc. designs, develops, manufactures, and distributes optical components and assemblies. The company offers precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light; and infrared products, including catalog and custom infrared optics. Its products are used in defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, and other sectors. The company sells its products directly to customers in Europe and Asia. LightPath Technologies, Inc. was founded in 1985 and is headquartered in Orlando, Florida.