Ameri (NASDAQ:AMRH) and Applied Optoelectronics (NASDAQ:AAOI) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Risk & Volatility

Ameri has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, Applied Optoelectronics has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500.

Earnings & Valuation

This table compares Ameri and Applied Optoelectronics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ameri $43.00 million 0.08 -$16.90 million N/A N/A
Applied Optoelectronics $267.46 million 0.85 -$2.15 million $0.53 21.21

Applied Optoelectronics has higher revenue and earnings than Ameri.

Insider and Institutional Ownership

50.4% of Ameri shares are owned by institutional investors. Comparatively, 61.5% of Applied Optoelectronics shares are owned by institutional investors. 12.2% of Ameri shares are owned by company insiders. Comparatively, 6.6% of Applied Optoelectronics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Ameri and Applied Optoelectronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ameri -55.53% -119.32% -47.21%
Applied Optoelectronics -19.57% -8.12% -5.31%

Analyst Recommendations

This is a summary of recent recommendations for Ameri and Applied Optoelectronics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameri 0 0 0 0 N/A
Applied Optoelectronics 2 4 1 0 1.86

Applied Optoelectronics has a consensus price target of $11.50, indicating a potential upside of 2.50%. Given Applied Optoelectronics’ higher probable upside, analysts clearly believe Applied Optoelectronics is more favorable than Ameri.

Summary

Applied Optoelectronics beats Ameri on 10 of the 12 factors compared between the two stocks.

About Ameri

Ameri Holdings, Inc. specializes in delivering SAP cloud, digital and enterprise services to clients worldwide. Its services center around SAP and include technology consulting, business intelligence, cloud services, application development/integration and maintenance, implementation services, infrastructure services, and independent validation services, all of which can be delivered as a set of managed services or on an on-demand service basis, or a combination of both. The company was founded by Srinidhi Devanur in February 1994 and is headquartered in Suwanee, GA.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to Internet data center operators, cable television and telecommunications equipment manufacturers, and Internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was founded in 1997 and is headquartered in Sugar Land, Texas.

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