Financial Review: Polar Power (POLA) and American Superconductor (AMSC)

Polar Power (NASDAQ: POLA) and American Superconductor (NASDAQ:AMSC) are both small-cap electrical components & equipment – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Earnings & Valuation

This table compares Polar Power and American Superconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Polar Power $22.80 million 2.27 $4.40 million $0.16 31.94
American Superconductor $75.19 million 0.99 -$27.37 million ($1.99) -1.79

Polar Power has higher earnings, but lower revenue than American Superconductor. American Superconductor is trading at a lower price-to-earnings ratio than Polar Power, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Polar Power and American Superconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Polar Power 8.59% 6.40% 5.86%
American Superconductor -50.90% -58.10% -34.66%

Institutional & Insider Ownership

7.3% of Polar Power shares are held by institutional investors. Comparatively, 28.5% of American Superconductor shares are held by institutional investors. 61.3% of Polar Power shares are held by insiders. Comparatively, 2.6% of American Superconductor shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Polar Power and American Superconductor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Polar Power 0 1 0 0 2.00
American Superconductor 0 1 5 0 2.83

Polar Power currently has a consensus target price of $5.00, suggesting a potential downside of 2.15%. American Superconductor has a consensus target price of $7.33, suggesting a potential upside of 105.99%. Given American Superconductor’s stronger consensus rating and higher possible upside, analysts plainly believe American Superconductor is more favorable than Polar Power.

Summary

Polar Power beats American Superconductor on 8 of the 13 factors compared between the two stocks.

About Polar Power

Polar Power, Inc. is engaged in designing, manufacturing and selling direct current (DC) power systems for applications primarily in the telecommunications, military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply markets. Within the telecommunications market, the Company’s DC power systems provide DC power to service applications that do not have access to the utility grid (such as off-grid applications) or have critical power needs and cannot be without power in the event of utility grid failure (such as back-up power applications). Its product offerings include DC base power systems, DC hybrid power systems and DC solar hybrid power systems. The Company’s technologies include Permanent Magnet Homopolar Hybrid (PMHH) Technology and Supra Controller Technology. Its power and control system architecture is controlled by its digital control system, Supra Controller, which contains software configured to meet specific application needs.

About American Superconductor

American Superconductor Corporation (AMSC) is a provider of megawatt-scale solutions. The Company operates through two segments: Wind and Grid. Through the Company’s Windtec Solutions brand, the Wind business segment enables manufacturers to field wind turbines. Through the Company’s Gridtec Solutions, the Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power. AMSC supplies power electronics and control systems, licenses its engineered wind turbine designs and provides customer support services to wind turbine manufacturers. The Company provides a range of power electronics and software-based control systems. AMSC provides transmission planning services that enable it to identify power grid congestion and other risks. The Company also sells grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems.

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