Critical Analysis: Energy Focus (NASDAQ:EFOI) versus Electrovaya (NASDAQ:ELVA)

Electrovaya (NASDAQ:ELVA) and Energy Focus (NASDAQ:EFOI) are both small-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Valuation & Earnings

This table compares Electrovaya and Energy Focus”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Electrovaya	$63.83 million	4.13	$3.36 million	$0.11	47.91
Energy Focus	$3.56 million	4.96	-$1.03 million	($0.25)	-11.08

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

Risk and Volatility

Electrovaya has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, Energy Focus has a beta of 2.18, meaning that its stock price is 118% more volatile than the S&P 500.

Profitability

This table compares Electrovaya and Energy Focus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Electrovaya	6.14%	7.96%	4.54%
Energy Focus	-23.77%	-42.44%	-25.33%

Analyst Recommendations

This is a summary of current recommendations and price targets for Electrovaya and Energy Focus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Electrovaya	0	2	3	1	2.83
Energy Focus	1	0	0	0	1.00

Electrovaya presently has a consensus price target of $17.50, indicating a potential upside of 232.07%. Given Electrovaya’s stronger consensus rating and higher probable upside, analysts plainly believe Electrovaya is more favorable than Energy Focus.

Institutional & Insider Ownership

22.5% of Electrovaya shares are held by institutional investors. Comparatively, 3.7% of Energy Focus shares are held by institutional investors. 48.9% of Energy Focus shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Electrovaya beats Energy Focus on 11 of the 14 factors compared between the two stocks.

About Electrovaya

Electrovaya Inc. engages in the design, development, manufacture, and sale of lithium-ion batteries, battery management systems, and battery-related products for energy storage, clean electric transportation, and other specialized applications in North America. It offers lithium-ion batteries and systems for materials handling electric vehicles, including forklifts and automated guided vehicles, as well as battery chargers to charge the batteries; electromotive power products for electric trucks, electric buses, and other transportation applications; industrial products for energy storage; and power solutions, such as competencies in building systems for third parties. The company was formerly known as Electrofuel Inc. and changed its name to Electrovaya Inc. in March 2002. Electrovaya Inc. was incorporated in 1996 and is headquartered in Mississauga, Canada.

About Energy Focus

Energy Focus, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and sells energy-efficient lighting systems, and controls and ultraviolet-C light disinfection products in the United States and internationally. It offers military maritime market light-emitting diode (LED) lighting products, such as Military-grade Intellitube retrofit TLED and the Invisitube ultra-low EMI TLED; and Military-grade fixtures, including LED globe lights, berth lights; high-bay fixtures and LED retrofit kits to serve the United States navy and allied foreign navies. The company also provides RedCap emergency battery backup TLEDs; EnFocus lighting platform, including dimming and color tuning; and LED retrofit solutions for linear fluorescent lamps, downlights, and retrofit kits for low-bay, high-bay and office applications; LED dock lights. It sells its products to military maritime, industrial, and commercial markets through direct sales employees, independent sales representatives, lighting agents, and distributors, as well as via e-commerce. The company was formerly known as Fiberstars, Inc. and changed its name to Energy Focus, Inc. in May 2007. Energy Focus, Inc. was founded in 1985 and is headquartered in Solon, Ohio.