Contrasting Energy Focus (EFOI) and Orion Energy Systems (NASDAQ:OESX)

Orion Energy Systems (NASDAQ: OESX) and Energy Focus (NASDAQ:EFOI) are both small-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares Orion Energy Systems and Energy Focus’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orion Energy Systems $67.14 million 0.39 -$11.57 million ($0.56) -1.64
Energy Focus $25.56 million 0.92 -$15.15 million ($1.59) -1.25

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

Profitability

This table compares Orion Energy Systems and Energy Focus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orion Energy Systems -23.70% -37.61% -22.58%
Energy Focus -72.83% -43.27% -36.91%

Analyst Ratings

This is a summary of recent ratings and price targets for Orion Energy Systems and Energy Focus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orion Energy Systems 0 2 1 0 2.33
Energy Focus 0 1 2 0 2.67

Orion Energy Systems presently has a consensus target price of $2.00, suggesting a potential upside of 117.39%. Energy Focus has a consensus target price of $4.38, suggesting a potential upside of 119.85%. Given Energy Focus’ stronger consensus rating and higher possible upside, analysts plainly believe Energy Focus is more favorable than Orion Energy Systems.

Volatility and Risk

Orion Energy Systems has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, Energy Focus has a beta of -0.23, indicating that its stock price is 123% less volatile than the S&P 500.

Institutional & Insider Ownership

45.2% of Orion Energy Systems shares are owned by institutional investors. Comparatively, 18.1% of Energy Focus shares are owned by institutional investors. 9.2% of Orion Energy Systems shares are owned by insiders. Comparatively, 11.4% of Energy Focus shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Orion Energy Systems beats Energy Focus on 8 of the 13 factors compared between the two stocks.

About Orion Energy Systems

Orion Energy Systems, Inc. is a designer and manufacturer of lighting platforms. The Company researches, develops, designs, manufactures, markets, sells and implements energy management systems consisting primarily of commercial and industrial interior and exterior lighting systems, and related services. The Company operates through three segments: Orion U.S. Markets Division (USM), Orion Engineered Systems Division (OES) and Distribution Services Division (ODS). The USM division develops and sells its commercial lighting systems and energy management systems to the wholesale contractor markets. The OES division develops and sells lighting products, and provides construction and engineering services for its commercial light emitting diode (LED) and high intensity fluorescent (HIF) lighting and energy management systems. The ODS division focuses on selling its lighting products through manufacturer representative agencies and a network of broadline North American distributors.

About Energy Focus

Energy Focus, Inc. along with its subsidiaries is engaged in the design, development, manufacturing, marketing, installation and sale of lighting systems. The Company is engaged in developing and selling of light-emitting diode (LED) lighting products for military maritime market, and general commercial and industrial markets. It produces, sources and/or markets a range of lighting technologies to serve its primary end markets. It offers military maritime products, such as Military Intellitube, military globe lights and military berth light to serve the United States navy and allied foreign navies. It offers commercial products, such as direct-wire tubular LED (TLED) replacements for linear fluorescent lamps, LED dock lights, low-bay and high-bay lighting for high-intensity discharge applications and LED retrofit kits to serve general commercial and industrial markets.

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