nLight (NASDAQ:LASR) & Broadcom (NASDAQ:AVGO) Critical Comparison

nLight (NASDAQ:LASR) and Broadcom (NASDAQ:AVGO) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for nLight and Broadcom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
nLight	1	1	9	1	2.83
Broadcom	0	4	27	1	2.91

nLight currently has a consensus target price of $69.06, suggesting a potential downside of 2.15%. Broadcom has a consensus target price of $455.07, suggesting a potential downside of 1.07%. Given Broadcom’s stronger consensus rating and higher possible upside, analysts plainly believe Broadcom is more favorable than nLight.

Volatility & Risk

nLight has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500. Comparatively, Broadcom has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Insider & Institutional Ownership

83.9% of nLight shares are held by institutional investors. Comparatively, 76.4% of Broadcom shares are held by institutional investors. 3.1% of nLight shares are held by insiders. Comparatively, 1.9% of Broadcom shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares nLight and Broadcom”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
nLight	$289.84 million	13.74	-$23.47 million	($0.30)	-235.27
Broadcom	$63.89 billion	34.09	$23.13 billion	$5.12	89.84

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

Profitability

This table compares nLight and Broadcom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
nLight	-5.08%	-4.18%	-3.20%
Broadcom	36.57%	38.61%	17.49%

Summary

Broadcom beats nLight on 11 of the 14 factors compared between the two stocks.

About nLight

nLIGHT, Inc. designs, develops, manufactures, and sells semiconductor and fiber lasers for industrial, microfabrication, and aerospace and defense applications. The company operates in two segments, Laser Products and Advanced Development. It offers semiconductor lasers with various ranges of power levels, wavelengths, and output fiber sizes; and programmable and serviceable fiber lasers for use in industrial and aerospace and defense applications. The company also provides laser sensors, including light detection and ranging technologies for intelligence, surveillance, and reconnaissance applications; and fiber amplifiers, beam combination, and control systems for use in high-energy laser systems in directed energy applications. It sells its products through direct sales force in the United States, China, South Korea, and European countries, as well as through independent sales representatives and distributors in Asia, Australia, Europe, the Middle East, and South America. The company was formerly known as nLight Photonics Corporation and changed its name to nLIGHT, Inc. in January 2016. nLIGHT, Inc. was incorporated in 2000 and is headquartered in Camas, Washington.

About Broadcom

Broadcom Inc. designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; wireless local area network access point SoCs; Ethernet switching and routing custom silicon solutions; serializer/deserializer application specific integrated circuits; optical and copper, and physical layer devices; and fiber optic components and RF semiconductor devices. The company also offers RF front end modules and filter; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; inductive charging; attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; optocouplers, industrial fiber optics, and motion control encoders and subsystems; light emitting diode, ethernet PHYs, switch ICs, and camera microcontrollers. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was founded in 1961 and is headquartered in Palo Alto, California.