Analyzing Neonode (NASDAQ:NEON) and Oracle (NYSE:ORCL)

Oracle (NYSE:ORCL) and Neonode (NASDAQ:NEON) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Institutional and Insider Ownership

42.4% of Oracle shares are owned by institutional investors. Comparatively, 11.6% of Neonode shares are owned by institutional investors. 40.9% of Oracle shares are owned by company insiders. Comparatively, 23.9% of Neonode shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Oracle has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Neonode has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Oracle and Neonode, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oracle	2	10	26	3	2.73
Neonode	1	1	0	0	1.50

Oracle currently has a consensus target price of $303.51, indicating a potential upside of 74.55%. Neonode has a consensus target price of $6.00, indicating a potential upside of 209.28%. Given Neonode’s higher probable upside, analysts plainly believe Neonode is more favorable than Oracle.

Valuation & Earnings

This table compares Oracle and Neonode”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oracle	$57.40 billion	8.70	$12.44 billion	$5.32	32.68
Neonode	$3.11 million	10.47	-$6.47 million	($0.32)	-6.06

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

Profitability

This table compares Oracle and Neonode’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oracle	25.28%	70.60%	9.22%
Neonode	408.88%	-38.60%	-32.68%

Summary

Oracle beats Neonode on 12 of the 15 factors compared between the two stocks.

About Oracle

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Cerner healthcare, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database and MySQL Database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. The company has a collaboration with Amdocs Limited to empower customers on their journey towards cloud and digital adoption. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.