Smart Global (NASDAQ: SGH) and Adesto Technologies (NASDAQ:IOTS) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Smart Global and Adesto Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smart Global 0 0 6 1 3.14
Adesto Technologies 0 0 2 0 3.00

Smart Global presently has a consensus target price of $36.36, suggesting a potential upside of 29.38%. Adesto Technologies has a consensus target price of $8.50, suggesting a potential upside of 14.09%. Given Smart Global’s stronger consensus rating and higher probable upside, analysts plainly believe Smart Global is more favorable than Adesto Technologies.

Profitability

This table compares Smart Global and Adesto Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Smart Global N/A N/A N/A
Adesto Technologies -13.86% -16.47% -7.57%

Valuation & Earnings

This table compares Smart Global and Adesto Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Smart Global $132.88 million 4.58 -$7.79 million ($0.53) -53.02
Adesto Technologies $43.97 million 3.58 -$11.61 million ($0.44) -16.93

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

Institutional & Insider Ownership

92.2% of Smart Global shares are held by institutional investors. Comparatively, 38.0% of Adesto Technologies shares are held by institutional investors. 22.1% of Adesto Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Smart Global beats Adesto Technologies on 11 of the 13 factors compared between the two stocks.

Smart Global Company Profile

Smart Global Holdings Inc. is a holding company. The Company through its subsidiaries provides specialty memory solutions. The Company manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The Company also serves original equipment manufacturer (OEM), customers to develop memory solutions. The Company also provides customized, integrated supply chain services to certain OEM customers to assist them in the management and execution of their procurement processes. The Company offers its products and services under a range of categories including dynamic random-access memory (DRAM) components, DRAM modules, flash components, mobile memory and supply chain services. The Company offers a range of DRAM modules including DIMMs, nonvolatile DIMMs, load reducing DIMMs, registered DIMMs, unbuffered DIMMs, small outline DIMMs, and mini-DIMMs.

Adesto Technologies Company Profile

Adesto Technologies Corporation is a provider of application-specific and ultra-low power non-volatile memory products. The Company optimizes its non-volatile memory products for Internet of Things (IoT), applications, including current and next-generation Internet-connected devices in the consumer, industrial, medical and wearables markets. It operates in application-specific and feature-rich, ultra-low power non-volatile memory (NVM) products segment. It combines its non-volatile memory design capabilities with intellectual property and differentiated technology platforms to deliver products that manage the overall energy consumption of its customers’ systems and battery life. Its products feature embedded intelligence in a small form factor. It sells its products directly to original equipment manufacturers and original design manufacturers, respectively that manufacture products for its end customers.

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