Critical Analysis: Lantronix (NASDAQ:LTRX) and Vecima Networks (OTCMKTS:VNWTF)

Lantronix (NASDAQ:LTRX) and Vecima Networks (OTCMKTS:VNWTF) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

39.4% of Lantronix shares are held by institutional investors. Comparatively, 0.3% of Vecima Networks shares are held by institutional investors. 2.4% of Lantronix 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Lantronix and Vecima Networks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lantronix	1	0	6	0	2.71
Vecima Networks	0	0	1	0	3.00

Lantronix currently has a consensus price target of $10.40, suggesting a potential upside of 93.31%. Given Lantronix’s higher probable upside, equities research analysts plainly believe Lantronix is more favorable than Vecima Networks.

Earnings & Valuation

This table compares Lantronix and Vecima Networks”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lantronix	$122.92 million	1.92	-$11.37 million	($0.17)	-31.65
Vecima Networks	N/A	N/A	N/A	$1.04	8.86

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

Profitability

This table compares Lantronix and Vecima Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lantronix	-5.52%	-6.79%	-4.17%
Vecima Networks	N/A	N/A	N/A

Summary

Vecima Networks beats Lantronix on 6 of the 11 factors compared between the two stocks.

About Lantronix

Lantronix, Inc. provides solutions for video surveillance, infotainment systems, and intelligent substations infrastructure in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT System Solutions, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; Embedded IoT Modules, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and Software and Engineering Services offers SaaS platform that enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login. It also offers telematics devices, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management; network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development. In addition, the company provides console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms; and hardware engineering, software engineering, and mechanical engineering, rapid prototyping and quality assurance engineering services. Lantronix, Inc. was incorporated in 1989 and is based in Irvine, California.

About Vecima Networks

Vecima Networks Inc. engages in the development of integrated hardware and software solutions for broadband access, content delivery, and telematics. The company operates through three segments: Video and Broadband Solutions, Content Delivery and Storage, and Telematics. The Video and Broadband Solutions segment offers platforms that process data from the cable network and deliver high-speed internet connectivity to homes over cable and fiber, as well as adapt video services. Its principal products include Terrace and TerraceQAM, which are designed to meet the needs of the business services verticals, such as multi- dwelling unit, hotels, motels, and resorts; and Entra distributed access architecture platform comprising EntraPHY, EntraMAC, EntraOptical, EntraControl, and EntraVideo that addresses the network migration to a distributed access architecture. The Content Delivery and Storage segment offers solutions and software for service providers and content owners that focus on ingesting, producing, storing, delivering, and streaming video for live linear, video on demand, network digital video recorder, and time-shifted services over the internet under the MediaScale brand. The Telematics segment provides information and analytics for fleet managers to manage their mobile and fixed assets under the Contigo and Nero Global Tracking brands. The company also offers optical access nodes, Terrace QAM, Terrace TC600E, Terrace IQ, Entra FPXT-B, Enra access code, Entra access controller, Entra access switch, Entra Remote PHY Monitor, Entra Video QAM Manager, MediaScale Origin, MediaScale storage, and MediaScale transcode. In addition, it provides engineering and consultation services; lifecycle program management; installation and commission; training and certification; workforce optimization; and operations and customer support services. The company was incorporated in 1988 and is headquartered in Victoria, Canada. Vecima Networks Inc. is a subsidiary of 684739 B.C. Ltd.