Critical Review: Neonode (NEON) versus The Competition

Neonode (NASDAQ:NEON) is one of 377 public companies in the “Electronic Equipment, Instruments & Components” industry, but how does it weigh in compared to its peers? We will compare Neonode to related companies based on the strength of its risk, profitability, earnings, institutional ownership, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

11.6% of Neonode shares are held by institutional investors. Comparatively, 43.3% of shares of all “Electronic Equipment, Instruments & Components” companies are held by institutional investors. 21.9% of Neonode shares are held by company insiders. Comparatively, 16.4% of shares of all “Electronic Equipment, Instruments & Components” companies are held by company 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.

Risk & Volatility

Neonode has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500. Comparatively, Neonode’s peers have a beta of -0.28, meaning that their average share price is 128% less volatile than the S&P 500.

Valuation and Earnings

This table compares Neonode and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Neonode	$2.06 million	$8.49 million	-1.92
Neonode Competitors	$115.49 billion	$173.80 million	2.64

Neonode’s peers have higher revenue and earnings than Neonode. Neonode is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Neonode and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neonode	397.84%	-32.35%	-28.42%
Neonode Competitors	-160.23%	-30.21%	-6.88%

Analyst Recommendations

This is a breakdown of current recommendations for Neonode and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neonode	1	0	0	0	1.00
Neonode Competitors	2049	7610	10441	662	2.47

As a group, “Electronic Equipment, Instruments & Components” companies have a potential upside of 41.16%. Given Neonode’s peers stronger consensus rating and higher possible upside, analysts plainly believe Neonode has less favorable growth aspects than its peers.

Summary

Neonode peers beat Neonode on 10 of the 13 factors compared.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.