Head-To-Head Survey: OSI Systems (NASDAQ:OSIS) & Smart Global (SGH)

OSI Systems (NASDAQ:OSIS) and Smart Global (NASDAQ:SGH) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Volatility & Risk

OSI Systems has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Smart Global has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for OSI Systems and Smart Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OSI Systems 0 1 3 0 2.75
Smart Global 0 1 4 0 2.80

OSI Systems presently has a consensus price target of $95.00, indicating a potential upside of 7.41%. Smart Global has a consensus price target of $41.60, indicating a potential upside of 82.30%. Given Smart Global’s stronger consensus rating and higher possible upside, analysts clearly believe Smart Global is more favorable than OSI Systems.

Insider & Institutional Ownership

98.6% of OSI Systems shares are held by institutional investors. Comparatively, 99.4% of Smart Global shares are held by institutional investors. 8.6% of OSI Systems shares are held by company insiders. Comparatively, 4.2% of Smart Global shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares OSI Systems and Smart Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OSI Systems 3.22% 14.93% 5.53%
Smart Global 7.49% 61.87% 18.20%

Valuation & Earnings

This table compares OSI Systems and Smart Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OSI Systems $1.09 billion 1.47 -$29.12 million $3.61 24.50
Smart Global $1.29 billion 0.41 $119.46 million $6.00 3.80

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

Summary

Smart Global beats OSI Systems on 10 of the 14 factors compared between the two stocks.

OSI Systems Company Profile

OSI Systems, Inc. designs, manufactures, and sells electronic systems and components worldwide. The company's Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation detection, and explosive and narcotics trace detection systems under the Rapiscan Systems and AS&E names. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The company's Healthcare segment offers patient monitoring, diagnostic cardiology, and anesthesia delivery and ventilation systems, as well as related supplies and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, as well as physicians' offices, medical clinics, and ambulatory surgery centers. Its Optoelectronics and Manufacturing segment provides optoelectronic devices primarily under the OSI Optoelectronics, OSI LaserDiode, and OSI Laserscan names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications primarily under the OSI Electronics, APlus Products, Altaflex, and PFC names; and LCD displays for medical, industrial, and consumer electronics applications, as well as flex circuits and touch panels. In addition, this segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was founded in 1987 and is headquartered in Hawthorne, California.

Smart Global Company Profile

SMART Global Holdings, Inc. designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements. It also provides flash memory, USB, and serial advanced technology attachment products primarily for use in communications equipment, printers, servers and storage products, switches, and routers; and aerospace, automotive, and defense industries, as well as industrial applications. In addition, the company provides networking, storage, and compute solutions, as well as HPC software to manage and use on premise and cloud computing clusters. Further, it offers supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. SMART Global Holdings, Inc. sells its products to OEMs through direct sales force and independent sales representatives in North America, Latin America, Asia, and Europe. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

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