Sequans Communications (NYSE:SQNS) vs. Netlist (OTCMKTS:NLST) Head-To-Head Comparison

Netlist (OTCMKTS:NLST) and Sequans Communications (NYSE:SQNS) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Netlist and Sequans Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netlist	0	0	1	0	3.00
Sequans Communications	0	0	1	0	3.00

Netlist presently has a consensus price target of $2.00, suggesting a potential upside of 113.20%. Sequans Communications has a consensus price target of $7.50, suggesting a potential upside of 119.94%. Given Sequans Communications’ higher possible upside, analysts clearly believe Sequans Communications is more favorable than Netlist.

Earnings & Valuation

This table compares Netlist and Sequans Communications”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$69.21 million	3.69	-$60.40 million	($0.22)	-4.26
Sequans Communications	$33.62 million	2.52	-$40.99 million	$1.41	2.42

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

Volatility and Risk

Netlist has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500.

Profitability

This table compares Netlist and Sequans Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Netlist	-37.19%	-852.20%	-94.11%
Sequans Communications	138.26%	403.46%	31.37%

Insider and Institutional Ownership

0.0% of Netlist shares are owned by institutional investors. Comparatively, 63.3% of Sequans Communications shares are owned by institutional investors. 2.7% of Netlist shares are owned by insiders. Comparatively, 9.4% of Sequans Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sequans Communications beats Netlist on 9 of the 12 factors compared between the two stocks.

About Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

About Sequans Communications

Sequans Communications S.A. engages in the fabless designing, developing, and supplying of cellular semiconductor solutions for massive and broadband Internet of Things (IoT) markets in Taiwan, Korea, China, rest of Asia, Germany, the United States, and internationally. It offers baseband solutions for use in encoding and decoding data based on 4G and 5G protocols for wireless processing platform for a cellular device; RF transceivers used to transmit and receive wireless transmissions; highly integrated SoC solutions that combine various functions into a single die or package; and LTE modules. The company also provides software, including source code and tools to enable manufacturers to integrate their solutions into their devices; and design support services. The company serves OEMs and ODMs Customers, as well as 4G and 5G wireless carriers. Sequans Communications S.A. was incorporated in 2003 and is based in Paris, France.