When it comes to small-cap computer technology companies, Xcerra Corporation (NASDAQ:$XCRA) and Axcelis Technologies (NASDAQ:$ACLS) are two contenders. How do they stack up against each other, though? Let’s look at the stats of these two companies.

About the Companies

Axcelis is designer, manufacturer and servicer of ion implantation and processing equipment used by their customers to manufacture semiconductor chips. They also provide used tools, equipment upgrades, maintenance services, customer training, and spare parts.

Xcerra Corporation provides interface products, test fixtures, test and handling capital equipment and other services to the their semiconductor manufacturing companies.

Earnings and Valuation

Axcelis has $324.69 million in Gross Revenue and a Price/Sales Ratio of 2.40 resulting in an EBITDA of $37.37 million. They also have an EPS of $0.91 and a Price/Earnings Ratio of 27.42.

Xcerra, on the other hand, has a Gross Revenue of $390.77 with a Price/Sales Ratio of 1.38 resulting in an EBITDA of $34.79 million. They also had an EPS of $0.42 and a Price/Earnings Ratio of 23.52.

From the above stats it is clear that Xcerra has higher earnings but lower revenue than Axcelis. However, since Xcerra is trading at a lower price-to-earnings, it appears to be the more affordable of the two stocks.

Profitability

Axcelis has a Return on Equity and a Return on Assets of 9.08% and 6.71% respectively, and gives them a Net Margin of 5.77%. Xcerra, on the other hand, has the edge with a Return on Equity of 12.52% and Return on Assets of 8.41% giving them a Net Margin of 9.10%.

Insider and Institutional Investors

75.3% of Axcelis is owned by institutions and 5.7% of it is owned by insiders. By comparison, Xcerra has 86.1% institutional ownership and 2.6% ownership by insiders. Institutional investment hints at investors faith in the company and its direction. Xcerra has a slight edge in this department. However, Axcelis has stronger insider ownership.

What are the Risks?

Axcelis Technologies currently hold a beta of 1.08, whereas Xcerra Corporation holds a beta of 1.60. The beta indicates the relative volatility of the stock as compared to a market average. The number starts at 1 and varies from there. In that case, Xcerra Corporation would be 60% more volatile than the market standard, whereas Axcelis Technology would be 8%. Axcelis is clearly the less risky investment.

Analysis

Axcelis currently has 1 ‘Hold’ rating and 3 ‘Buy’ ratings from brokerages, giving a total rating score of 2.75 or an aggregate ‘Buy’. Xcerra, by comparison, has 1 ‘Hold’ and 3 ‘Buy’ ratings for a total rating score of 2.00 or a ‘Hold’. Axcelis has the edge here.

As for consensus target price, Axcelis has a $25.60, suggesting a possible 2.61% upside. Xcerra has a slight edge here, with a target price of $10.25 and a possible upside of 3.74%.

The Bottom Line

Xcerra Corporation loses to Axcelis in 10 of the 14 factors compared above.

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