Critical Analysis: Socket Mobile (NASDAQ:SCKT) and Plexus (NASDAQ:PLXS)

Plexus (NASDAQ:PLXS) and Socket Mobile (NASDAQ:SCKT) are both technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Valuation and Earnings

This table compares Plexus and Socket Mobile”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Plexus	$4.03 billion	1.53	$172.88 million	$6.78	33.99
Socket Mobile	$15.08 million	0.26	-$14.38 million	($1.85)	-0.26

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

Insider & Institutional Ownership

94.5% of Plexus shares are owned by institutional investors. Comparatively, 3.8% of Socket Mobile shares are owned by institutional investors. 1.8% of Plexus shares are owned by company insiders. Comparatively, 54.8% of Socket Mobile shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Plexus and Socket Mobile’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Plexus	4.03%	12.46%	5.57%
Socket Mobile	-107.50%	-229.41%	-89.45%

Volatility & Risk

Plexus has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Socket Mobile has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Plexus and Socket Mobile, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Plexus	0	0	7	1	3.12
Socket Mobile	1	0	0	0	1.00

Plexus currently has a consensus target price of $276.86, suggesting a potential upside of 20.13%. Given Plexus’ stronger consensus rating and higher probable upside, equities analysts plainly believe Plexus is more favorable than Socket Mobile.

Summary

Plexus beats Socket Mobile on 13 of the 15 factors compared between the two stocks.

About Plexus

Plexus Corp. provides electronic manufacturing services in the United States and internationally. It offers design, develop, supply chain, new product introduction, and manufacturing solutions, as well as sustaining services to companies in the healthcare/life sciences, industrial/commercial, aerospace/defense, and communications market sectors. The company was founded in 1979 and is headquartered in Neenah, Wisconsin.

About Socket Mobile

Socket Mobile, Inc. provides data capture and delivery solutions in the United States, Europe, Asia, and internationally. Its products and solutions are integrated into mobile applications for applications in the areas of point of sale, commercial services, asset tracking, manufacturing and quality control processes, transportation and logistics, event management, medical, and education. The company also offers cordless data capture devices that connect through Bluetooth and work with applications running on smartphones, mobile computers, and tablets; SocketScan and DuraScan 700 series, companion scanners and 800 series, attachable scanners, and wearables; and DuraSled, a barcode scanning sled that protects phones from impact damage and provides charging solutions. In addition, it offers D600, a handheld model to reads and writes various types of electronic SmartTags and transfers data with near-field communication (NFC); S550, a contactless membership card reader/writer; and S370 product that supports barcode scanning, and NFC reading and writing technologies. Further, the company provides SocketCam C820 and C860, which are camera-based barcode scanners; software developer kits, such as CaptureSDK that enables the App providers to modify captured data, control the placement of the barcoded or RFID data in their applications, and control the feedback to the user. It serves retail, commercial services, industrial and manufacturing, transportation and logistics, and healthcare industries through a network of distributors, online resellers, and application providers, as well as online stores. The company was formerly known as Socket Communications, Inc. and changed its name to Socket Mobile, Inc. in April 2008. Socket Mobile, Inc. was founded in 1992 and is headquartered in Fremont, California.