Comparing Flex (NASDAQ:FLEX) & CSP (NASDAQ:CSPI)

Flex (NASDAQ:FLEX) and CSP (NASDAQ:CSPI) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Flex and CSP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flex	0	3	7	1	2.82
CSP	1	0	0	0	1.00

Flex currently has a consensus price target of $119.67, suggesting a potential upside of 52.75%. Given Flex’s stronger consensus rating and higher probable upside, analysts plainly believe Flex is more favorable than CSP.

Institutional and Insider Ownership

94.3% of Flex shares are held by institutional investors. Comparatively, 26.7% of CSP shares are held by institutional investors. 0.6% of Flex shares are held by company insiders. Comparatively, 15.0% of CSP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Flex and CSP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flex	3.32%	23.15%	5.50%
CSP	-1.22%	-1.56%	-0.99%

Volatility and Risk

Flex has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, CSP has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Earnings and Valuation

This table compares Flex and CSP”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flex	$27.91 billion	1.04	$880.00 million	$2.59	30.25
CSP	$58.73 million	1.31	-$90,000.00	($0.07)	-108.69

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

Summary

Flex beats CSP on 13 of the 15 factors compared between the two stocks.

About Flex

Flex Ltd. provides technology, supply chain, and manufacturing solutions in Asia, the Americas, and Europe. It operates through three segments: Flex Agility Solutions (FAS), Flex Reliability Solutions (FRS), and Nextracker. The FAS segment offers flexible supply and manufacturing system comprising communications, enterprise and cloud solution, which includes data, edge, and communications infrastructure; lifestyle solution including appliances, consumer packaging, floorcare, micro mobility, and audio; and consumer devices, such as mobile and high velocity consumer devices. Its FRS segment provides complex ramps with specialized production models and critical environments, which comprise automotive including next generation mobility, autonomous, connectivity, electrification, and smart technologies; health solutions, such as medical devices, medical equipment, and drug delivery; and industrial solutions including capital equipment, industrial devices, and renewables and grid edge. The Nextracker segment offers solar tracker and software solutions, which are used in utility-scale and ground-mounted distributed generation solar projects. In addition, it provides a broad array of services including design and engineering, component services, rapid prototyping, fulfillment, and circular economy solutions. The company was formerly known as Flextronics International Ltd. and changed its name to Flex Ltd. in September 2016. Flex Ltd. was founded in 1969 and is headquartered in Singapore.

About CSP

CSP Inc. develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication. The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; ARIA Zero Trust PROTECT that stopping the attacks that are used to attack critical infrastructure applications; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets. CSP Inc. was incorporated in 1968 and is headquartered in Lowell, Massachusetts.