Head to Head Survey: RadiSys (RSYS) and Sanmina (SANM)

RadiSys (NASDAQ: RSYS) and Sanmina (NASDAQ:SANM) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.

Valuation and Earnings

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This table compares RadiSys and Sanmina’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RadiSys $133.77 million 0.20 -$52.60 million ($1.34) -0.51
Sanmina $6.87 billion 0.27 $138.83 million ($0.95) -27.47

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

Analyst Ratings

This is a summary of current ratings and target prices for RadiSys and Sanmina, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RadiSys 0 0 5 0 3.00
Sanmina 0 3 2 0 2.40

RadiSys currently has a consensus price target of $3.60, suggesting a potential upside of 427.16%. Sanmina has a consensus price target of $37.25, suggesting a potential upside of 42.72%. Given RadiSys’ stronger consensus rating and higher possible upside, equities analysts plainly believe RadiSys is more favorable than Sanmina.

Profitability

This table compares RadiSys and Sanmina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RadiSys -39.33% -71.41% -20.87%
Sanmina -0.88% 11.61% 5.07%

Insider and Institutional Ownership

38.6% of RadiSys shares are owned by institutional investors. Comparatively, 93.6% of Sanmina shares are owned by institutional investors. 6.1% of RadiSys shares are owned by insiders. Comparatively, 5.1% of Sanmina shares are owned by 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.

Risk and Volatility

RadiSys has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Sanmina has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Summary

Sanmina beats RadiSys on 8 of the 13 factors compared between the two stocks.

RadiSys Company Profile

Radisys Corporation (Radisys) is a services acceleration company. The Company’s application aware traffic distribution platforms, real-time media processing products and wireless access technologies enable service providers to virtualize and monetize their networks. The Company’s products and services are organized into two segments: Software-Systems, and Embedded Products and Hardware Services. The Company’s Software-Systems segment consists of three product families: FlowEngine, MediaEngine and CellEngine. Also included in the Software-Systems segment is its Professional Service organization. The Company’s Embedded Products and Hardware Services segment provides customers with hardware based products targeted at the communications and healthcare markets. Products within this segment fall under primary categories, including T-Series Advanced Telecommunications Computing Architecture (ATCA) Platforms, Component Object Model (COM) Express and Rackmount Servers, and Other Products.

Sanmina Company Profile

Sanmina Corporation is a provider of integrated manufacturing solutions, components, products and repair, logistics and after-market services. The Company provides its offerings primarily to original equipment manufacturers (OEMs) in various industries, including communications networks, storage, industrial, defense and aerospace, medical and energy. The Company operates through two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products and Services (CPS). IMS consists of printed circuit board assembly and test, final system assembly and test, and direct-order-fulfillment. Its Components include interconnect systems and mechanical systems. Its Products include memory, radio frequency (RF), optical and microelectronics solutions, defense and aerospace products, storage solutions and cloud-based manufacturing execution software. Its Services include design, engineering, logistics and repair services.

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