Contrasting A10 Networks (ATEN) & TESSCO Technologies (TESS)

A10 Networks (NYSE: ATEN) and TESSCO Technologies (NASDAQ:TESS) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

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This table compares A10 Networks and TESSCO Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A10 Networks -6.94% -17.63% -7.12%
TESSCO Technologies 0.57% 3.43% 1.96%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for A10 Networks and TESSCO Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A10 Networks 0 2 1 0 2.33
TESSCO Technologies 0 0 0 0 N/A

A10 Networks currently has a consensus target price of $7.75, indicating a potential upside of 24.00%. Given A10 Networks’ higher probable upside, research analysts plainly believe A10 Networks is more favorable than TESSCO Technologies.

Insider and Institutional Ownership

62.2% of A10 Networks shares are owned by institutional investors. Comparatively, 57.5% of TESSCO Technologies shares are owned by institutional investors. 31.6% of A10 Networks shares are owned by insiders. Comparatively, 26.9% of TESSCO Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

A10 Networks has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, TESSCO Technologies has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Valuation and Earnings

This table compares A10 Networks and TESSCO Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A10 Networks $230.00 million 1.92 -$20.94 million ($0.25) -25.00
TESSCO Technologies $533.29 million 0.36 $1.44 million $0.38 60.32

TESSCO Technologies has higher revenue and earnings than A10 Networks. A10 Networks is trading at a lower price-to-earnings ratio than TESSCO Technologies, indicating that it is currently the more affordable of the two stocks.

Dividends

TESSCO Technologies pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. A10 Networks does not pay a dividend. TESSCO Technologies pays out 210.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

TESSCO Technologies beats A10 Networks on 9 of the 15 factors compared between the two stocks.

A10 Networks Company Profile

A10 Networks, Inc. is a provider of software and hardware solutions. The Company’s solutions enable its customers to secure and optimize the performance of their data center and cloud applications, and secure their users, applications and infrastructure from Internet, Web and network threats at scale. The Company offers a portfolio of hardware, software and cloud offerings. Its customers include cloud providers, Web-scale companies, service providers, government organizations and enterprises. The Company’s portfolio consists of six application delivery and security products, including Application Delivery Controllers (ADC), Lightning Application Delivery Service (Lightning ADS), Carrier Grade Network Address Translation (CGN), Threat Protection System (TPS), SSL Insight (SSLi) and Convergent Firewall (CFW). The Company’s products are available in a range of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software.

TESSCO Technologies Company Profile

TESSCO Technologies Incorporated architects and delivers the product and value chain solutions to organizations responsible for building, operating, maintaining and reselling cellular, mobile communications, wireless-fidelity (Wi-Fi), machine-to-machine, Internet of Things and wireless backhaul systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems utilizing Internet and information technology. Its customers include a diversified mix of carrier and public network operators, tower owners, program managers, contractors and integrators, wireless Internet service providers, industrial and enterprise self-maintained users (including railroads, utilities, mining operators, oil and gas operators and technicians), governments, manufacturers, value-added resellers, tier 1, 2 and 3 retail carrier stores and their independent agents, dealers and consumers, as well as other local and national retailers.

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