Head to Head Comparison: Xcerra (XCRA) and EXFO (EXFO)

Xcerra (NASDAQ: XCRA) and EXFO (NASDAQ:EXFO) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Insider & Institutional Ownership

91.1% of Xcerra shares are owned by institutional investors. Comparatively, 16.4% of EXFO shares are owned by institutional investors. 2.6% of Xcerra shares are owned by company insiders. Comparatively, 20.0% of EXFO shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Xcerra has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, EXFO has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares Xcerra and EXFO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcerra 9.85% 16.22% 12.20%
EXFO -2.18% 4.49% 3.25%

Valuation & Earnings

This table compares Xcerra and EXFO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Xcerra $390.77 million 1.91 $22.55 million $0.49 27.73
EXFO $243.30 million 0.82 $850,000.00 $0.21 17.14

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

Analyst Ratings

This is a summary of current recommendations for Xcerra and EXFO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra 0 3 2 0 2.40
EXFO 0 4 1 0 2.20

Xcerra currently has a consensus target price of $13.42, suggesting a potential downside of 1.28%. EXFO has a consensus target price of $5.30, suggesting a potential upside of 47.22%. Given EXFO’s higher possible upside, analysts clearly believe EXFO is more favorable than Xcerra.

Summary

Xcerra beats EXFO on 12 of the 14 factors compared between the two stocks.

Xcerra Company Profile

Xcerra Corporation provides test and handling capital equipment, interface products, and test fixtures and related services to the semiconductor and electronics manufacturing industries worldwide. It operates through two segments, Semiconductor Test Solutions and Electronic Manufacturing Solutions. The company offers Diamond series platform that offers high-density packaging for the testing of microcontrollers, and consumer and digital-based ASSP and ASIC devices; X-Series platform that offers configurations for the testing of analog-based ASSP and ASIC, power, automotive, mixed signal, and RF applications; and ASL platform for testing linear, low-end mixed signal, precision analog, and power management devices. It provides test handlers, including pick-and-place, gravity, strip, and microelectromechanical systems; bare board printed circuit board (PCB) test systems; test contactors for standard, power, and RF markets; probe pins; and loaded PCB test fixtures. In addition, the company engages in the installation and maintenance of test and handling systems, including servicing of spare parts manufactured by third parties; and provision of parts and labor warranties on test and handling systems, and instruments, as well as training on the maintenance and operation of test and handling systems. It markets and sells its products through internal direct sales organization and external distributors. The company was formerly known as LTX-Credence Corporation and changed its name to Xcerra Corporation in May 2014. Xcerra Corporation was founded in 1976 and is headquartered in Norwood, Massachusetts.

EXFO Company Profile

EXFO Inc. develops, manufactures, and markets smarter network test, monitoring, and analytics solutions for communications service providers, network equipment manufacturers, and Webscale companies. It offers lab and manufacturing testing systems, including lab platforms; network simulation and load testing tools to meet the mobile telecom and VOIP/IMS network test challenges; transport and datacom solutions, such as Ethernet testing, fiber channel testing, DSn/PDH and SONET/SDH testing, synchronization testing, and SONET/SDH, OTN, and multiservice testing solutions; and optical products comprising power meters, light sources and amplifiers, variable attenuators, switch and utility modules, polarization analysis, optical communication analyzers, spectral testing products, bit-error-rate testing products, optical benchtop kits, osics multifunction platform, optical component testers, and tunable filters. The company also provides field network testing products, including FTB Ecosystem test tools; FTB platforms; test function virtualization solutions; transport and datacom solutions designed to address DSn/PDH and SONET/SDH, carrier Ethernet, testing needs; optical instruments; copper access/triple-play handheld instruments to assess the quality of access network physical layer and performance of multiplay services; mobile broadband tools to meet mobile telecom network test challenges; and wireless network testing solutions. In addition, it offers service assurance platforms, fiber network monitoring and management solutions, and remote network monitoring solutions; and solutions for FTTx access networks and metro/core networks, as well as technical support, instrument, and system services. The company sells products through its direct sales force, sales representatives, and distributors in the United States, Canada, and others. EXFO Inc. was founded in 1985 and is headquartered in Quebec, Canada. EXFO Inc. is a subsidiary of G. Lamonde Investissements Financiers Inc.

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