Sierra Wireless (NASDAQ: HLIT) and Harmonic (NASDAQ:HLIT) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.
Risk and Volatility
Sierra Wireless has a beta of 2.98, suggesting that its stock price is 198% more volatile than the S&P 500. Comparatively, Harmonic has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Sierra Wireless and Harmonic, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sierra Wireless currently has a consensus price target of $23.60, indicating a potential upside of 9.01%. Harmonic has a consensus price target of $6.75, indicating a potential upside of 26.76%. Given Harmonic’s stronger consensus rating and higher possible upside, analysts clearly believe Harmonic is more favorable than Sierra Wireless.
Valuation and Earnings
This table compares Sierra Wireless and Harmonic’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sierra Wireless||$692.08 million||1.13||$4.13 million||$0.58||37.33|
|Harmonic||$358.25 million||1.28||-$82.95 million||($0.54)||-9.86|
Sierra Wireless has higher revenue and earnings than Harmonic. Harmonic is trading at a lower price-to-earnings ratio than Sierra Wireless, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
25.3% of Sierra Wireless shares are owned by institutional investors. Comparatively, 86.5% of Harmonic shares are owned by institutional investors. 2.0% of Sierra Wireless shares are owned by insiders. Comparatively, 6.2% of Harmonic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares Sierra Wireless and Harmonic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sierra Wireless beats Harmonic on 9 of the 14 factors compared between the two stocks.
Sierra Wireless Company Profile
Sierra Wireless, Inc., together with its subsidiaries, engages in building the Internet of Things (IoT) with intelligent wireless solutions in North America, Europe, and the Asia Pacific. It operates in three segments: Original Equipment Manufacturer (OEM) Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The OEM Solutions segment offers embedded cellular modules, short range wireless modules, software, and tools to integrate wireless connectivity into various products and solutions for OEM customers, including the embedded wireless modules product portfolio; and Legato, an open source, Linux-based application framework. This segment provides its products and solutions to a range of industries, including automotive, transportation, enterprise networking, energy, sales and payment, mobile computing, security, industrial monitoring, field services, residential, healthcare, and other industries. It also offers professional services to OEM customers during their product development and launch process. The Enterprise Solutions segment provides a range of second, third, and fourth generation LTE intelligent cellular routers and gateways, as well as security and device management solutions, and professional services to public safety, transportation field service, energy, industrial, retail, and financial enterprises. The Cloud and Connectivity Services segment provides secure and scalable cloud based platform for deploying and managing IoT subscriptions, devices, data, and applications; connectivity services, which include smart SIM and core network platforms; and managed broadband cellular services. Sierra Wireless, Inc. sells its products directly, as well as through various indirect channels, such as OEMs, distributors, value added resellers, and hardware vendors, as well as SIM vendors and mobile network operators. The company was founded in 1993 and is headquartered in Richmond, Canada.
Harmonic Company Profile
Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions worldwide. Its products enable customers to create, prepare, and deliver a range of video and broadband services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company operates in two segments, Video and Cable Edge. The Video segment sells video processing, and production and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media companies, including streaming new media companies. This segment's video processing solutions include network management and application software, and hardware products, such as cloud media processing, broadcast and distribution encoders, contribution encoders, multiscreen transcoders and stream processing systems, multiscreen delivery, decoders and descramblers, and video servers. This segment also provides video-optimized storage systems; and unified video playout and processing software-as-a-service solutions. The Cable Edge segment offers cable edge solutions and related services, including CableOS software-based converged cable access platform solutions; and narrowcast services gateway products primarily to cable operators. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, system testing, and training. Harmonic Inc. sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was founded in 1988 and is headquartered in San Jose, California.
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