Critical Survey: LightPath Technologies (NASDAQ:LPTH) vs. FormFactor (NASDAQ:FORM)

FormFactor (NASDAQ:FORM) and LightPath Technologies (NASDAQ:LPTH) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FormFactor	$705.94 million	4.92	$82.39 million	$1.32	34.08
LightPath Technologies	$31.73 million	1.75	-$8.01 million	($0.18)	-7.94

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for FormFactor and LightPath Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FormFactor	0	4	4	0	2.50
LightPath Technologies	0	0	2	0	3.00

FormFactor currently has a consensus price target of $59.63, indicating a potential upside of 32.53%. LightPath Technologies has a consensus price target of $3.00, indicating a potential upside of 109.79%. Given LightPath Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe LightPath Technologies is more favorable than FormFactor.

Profitability

This table compares FormFactor and LightPath Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FormFactor	17.20%	4.18%	3.43%
LightPath Technologies	-25.24%	-24.55%	-15.46%

Institutional & Insider Ownership

98.8% of FormFactor shares are owned by institutional investors. Comparatively, 56.3% of LightPath Technologies shares are owned by institutional investors. 1.0% of FormFactor shares are owned by insiders. Comparatively, 5.2% of LightPath Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

FormFactor has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, LightPath Technologies has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Summary

FormFactor beats LightPath Technologies on 10 of the 14 factors compared between the two stocks.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions in the United States, Taiwan, South Korea, China, Europe, Japan, Malaysia, Singapore, and internationally. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices, as well as computer processor devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probe systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. It markets and sells its products through direct sales force, manufacturers' representatives, and distributors. The company was incorporated in 1993 and is headquartered in Livermore, California.

About LightPath Technologies

LightPath Technologies, Inc. designs, develops, manufactures, and distributes optical components and assemblies. The company offers precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light; and infrared products, including catalog and custom infrared optics. Its products are used in defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, and other sectors. The company sells its products directly to customers in Europe and Asia. LightPath Technologies, Inc. was founded in 1985 and is headquartered in Orlando, Florida.