AXT (NASDAQ:AXTI – Get Free Report) and Nova (NASDAQ:NVMI – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.
Volatility and Risk
AXT has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, Nova has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.
Institutional and Insider Ownership
49.5% of AXT shares are held by institutional investors. Comparatively, 83.0% of Nova shares are held by institutional investors. 8.8% of AXT shares are held by insiders. Comparatively, 1.0% of Nova shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AXT | 0 | 0 | 4 | 0 | 3.00 |
| Nova | 0 | 1 | 4 | 0 | 2.80 |
AXT presently has a consensus target price of $4.60, indicating a potential upside of 124.39%. Nova has a consensus target price of $282.50, indicating a potential upside of 11.07%. Given AXT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe AXT is more favorable than Nova.
Profitability
This table compares AXT and Nova’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AXT | -27.68% | -11.38% | -7.02% |
| Nova | 29.10% | 24.36% | 16.66% |
Earnings and Valuation
This table compares AXT and Nova”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AXT | $86.08 million | 1.09 | -$11.62 million | ($0.55) | -3.73 |
| Nova | $672.40 million | 11.12 | $183.76 million | $7.35 | 34.61 |
Nova has higher revenue and earnings than AXT. AXT is trading at a lower price-to-earnings ratio than Nova, indicating that it is currently the more affordable of the two stocks.
Summary
Nova beats AXT on 9 of the 13 factors compared between the two stocks.
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.
About Nova
Nova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.
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