Head to Head Analysis: AXT (NASDAQ:AXTI) vs. POET Technologies (NASDAQ:POET)

POET Technologies (NASDAQ:POET) and AXT (NASDAQ:AXTI) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for POET Technologies and AXT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	1	0	0	0	1.00
AXT	1	2	2	0	2.20

POET Technologies currently has a consensus target price of $8.00, suggesting a potential downside of 38.58%. AXT has a consensus target price of $22.80, suggesting a potential downside of 81.09%. Given POET Technologies’ higher probable upside, analysts plainly believe POET Technologies is more favorable than AXT.

Valuation and Earnings

This table compares POET Technologies and AXT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
POET Technologies	$1.08 million	1,851.84	-$62.96 million	($0.72)	-18.09
AXT	$88.33 million	89.32	-$21.26 million	($0.31)	-389.02

AXT has higher revenue and earnings than POET Technologies. AXT is trading at a lower price-to-earnings ratio than POET Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares POET Technologies and AXT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
POET Technologies	-5,786.60%	-27.24%	-20.63%
AXT	-14.69%	-5.71%	-3.65%

Volatility and Risk

POET Technologies has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, AXT has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.

Insider and Institutional Ownership

2.0% of POET Technologies shares are held by institutional investors. Comparatively, 49.5% of AXT shares are held by institutional investors. 0.5% of POET Technologies shares are held by insiders. Comparatively, 6.0% of AXT shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

AXT beats POET Technologies on 11 of the 14 factors compared between the two stocks.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.