Critical Review: Resonant (RESN) & Veeco Instruments (VECO)

Veeco Instruments (NASDAQ: VECO) and Resonant (NASDAQ:RESN) are both small-cap semiconductors – nec companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Veeco Instruments and Resonant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veeco Instruments 0 3 6 0 2.67
Resonant 0 0 3 0 3.00

Veeco Instruments presently has a consensus target price of $28.50, indicating a potential upside of 85.67%. Resonant has a consensus target price of $8.00, indicating a potential upside of 58.42%. Given Veeco Instruments’ higher probable upside, equities research analysts clearly believe Veeco Instruments is more favorable than Resonant.

Volatility and Risk

Veeco Instruments has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Resonant has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Profitability

This table compares Veeco Instruments and Resonant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veeco Instruments -10.16% -0.73% -0.47%
Resonant -2,772.35% -150.45% -125.40%

Earnings and Valuation

This table compares Veeco Instruments and Resonant’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Veeco Instruments $332.45 million 2.23 -$122.21 million ($0.99) -15.51
Resonant $300,000.00 282.46 -$15.24 million ($1.47) -3.44

Resonant has higher revenue, but lower earnings than Veeco Instruments. Veeco Instruments is trading at a lower price-to-earnings ratio than Resonant, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

97.2% of Veeco Instruments shares are held by institutional investors. Comparatively, 4.5% of Resonant shares are held by institutional investors. 2.9% of Veeco Instruments shares are held by insiders. Comparatively, 22.3% of Resonant shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Veeco Instruments beats Resonant on 8 of the 13 factors compared between the two stocks.

About Veeco Instruments

Veeco Instruments Inc. is engaged in the design, development, manufacture and support of thin film process equipment, primarily sold to make electronic devices. The Company’s geographical segments include the United States; China; Europe, Middle East and Africa (EMEA), and Rest of World (ROW). The Company’s portfolio of technology solutions focus on market areas, including Lighting, Display & Power Electronics; Advanced Packaging, micro-electromechanical systems (MEMS) & radio frequency (RF); Scientific & Industrial, and Data Storage. The Company’s equipment is used to make electronic devices, including light emitting diodes (LEDs), MEMS, wireless devices, power electronics, hard disk drives (HDDs) and semiconductor devices. The Company’s System products include Metal Organic Chemical Vapor Deposition Systems, Precision Surface Processing Systems, Ion Beam Etch and Deposition Systems, Molecular Beam Epitaxy Systems, and Other Deposition and Industrial Products.

About Resonant

Resonant Inc. is a late-stage development company. The Company creates filter designs for radio frequency (RF) front-ends for the mobile device industry. The RF front-end is the circuitry in a mobile device for analog signal processing and is located between the device’s antenna and its digital baseband. The Company uses a technology called Infinite Synthesized Networks (ISN) to configure and connect resonators, the building blocks of RF filters. The Company uses ISN to develop new classes of filter designs. The Company is also developing a series of single-band surface acoustic wave (SAW) filter designs for frequency bands. The Company is developing multiplexer filter designs for over two bands to address the carrier aggregation (CA) requirements of its customers. In addition, the Company is also developing reconfigurable filter designs to replace multiple filters for multiple bands. The Company is also involved in the development of a filter reconfigurable between three bands.

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