Contrasting Lantronix (LTRX) & West (WSTC)

West (NASDAQ: WSTC) and Lantronix (NASDAQ:LTRX) are both small-cap technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Valuation and Earnings

This table compares West and Lantronix’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
West N/A N/A N/A $2.52 9.33
Lantronix $44.73 million 0.88 -$270,000.00 ($0.05) -43.60

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

Analyst Ratings

This is a summary of recent ratings and price targets for West and Lantronix, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
West 0 4 0 0 2.00
Lantronix 0 0 1 0 3.00

West presently has a consensus price target of $23.75, suggesting a potential upside of 1.06%. Lantronix has a consensus price target of $4.00, suggesting a potential upside of 83.49%. Given Lantronix’s stronger consensus rating and higher probable upside, analysts plainly believe Lantronix is more favorable than West.

Dividends

West pays an annual dividend of $0.45 per share and has a dividend yield of 1.9%. Lantronix does not pay a dividend. West pays out 17.9% of its earnings in the form of a dividend.

Profitability

This table compares West and Lantronix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
West 7.79% N/A 5.18%
Lantronix -1.83% 2.39% 1.64%

Insider & Institutional Ownership

67.4% of West shares are owned by institutional investors. Comparatively, 16.5% of Lantronix shares are owned by institutional investors. 4.6% of West shares are owned by company insiders. Comparatively, 52.4% of Lantronix shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Lantronix beats West on 7 of the 13 factors compared between the two stocks.

West Company Profile

West Corporation is a provider of communication and network infrastructure services. The Company helps its clients communicate, collaborate and connect with their audiences through a portfolio of solutions that include unified communications services, safety services, and interactive services, such as automated notifications, specialized agent services and telecom services. The Company’s segments include Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes carrier services, government solutions and advanced services; Interactive Services, including outbound (proactive notifications-voice, text/short messaging service (SMS) and chat), inbound speech solutions (interactive voice response or IVR), Web, mobile and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation.

Lantronix Company Profile

Lantronix, Inc. is a provider of secure data access and management solutions for Internet of things (IoT) and information technology (IT) assets. The Company organizes its products and solutions into three product lines, including IoT, IT Management and Other. Its IoT products consist of IoT Gateways and IoT Building Blocks. The Company’s IT Management product line includes console management, power management and keyboard video mouse (KVM), products that provide remote out-of-band management (OOBM) access to IT and networking infrastructure deployed in test labs, data centers and server rooms. Its Other product line includes non-focus products, such as the xPrintServer, xSenso and WiBox. Its connectivity solutions serves a range of industries, including data center, medical, security, environmental and government. The Company conducts its business in approximately three geographic regions, including the Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific Japan (APJ).

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