Financial Analysis: Sequans Communications (SQNS) vs. JA Solar (JASO)

JA Solar (NASDAQ: JASO) and Sequans Communications (NYSE:SQNS) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Analyst Ratings

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This is a breakdown of recent recommendations and price targets for JA Solar and Sequans Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
JA Solar 1 2 0 0 1.67
Sequans Communications 0 0 7 0 3.00

JA Solar presently has a consensus target price of $6.33, indicating a potential downside of 9.26%. Sequans Communications has a consensus target price of $3.75, indicating a potential upside of 116.76%. Given Sequans Communications’ stronger consensus rating and higher probable upside, analysts plainly believe Sequans Communications is more favorable than JA Solar.

Valuation and Earnings

This table compares JA Solar and Sequans Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
JA Solar $2.27 billion 0.15 $102.89 million $1.88 3.71
Sequans Communications $48.26 million 2.87 -$26.16 million ($0.31) -5.58

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

Insider & Institutional Ownership

33.0% of JA Solar shares are held by institutional investors. Comparatively, 25.6% of Sequans Communications shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

JA Solar has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Sequans Communications has a beta of 2.36, meaning that its share price is 136% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
JA Solar 2.84% 7.73% 2.52%
Sequans Communications -54.20% -314.69% -37.52%

Summary

JA Solar beats Sequans Communications on 8 of the 13 factors compared between the two stocks.

JA Solar Company Profile

JA Solar Holdings Co., Ltd., together with its subsidiaries, designs, develops, manufactures, and sells solar power products based on crystalline silicon technologies. The company's principal products include monocrystalline and multicrystalline solar cells and modules. It also provides monocrystalline and multicrystalline silicon wafers; solar product processing services; and solar power plant project development and electricity generation services. The company sells its products primarily under the JA Solar brand name, as well as produces original equipment for manufacturers or customers under their brand names. JA Solar Holdings Co., Ltd. sells its solar cell and module products to module manufacturers, system integrators, project developers, and distributors worldwide. The company was founded in 2005 and is based in Beijing, the People's Republic of China.

Sequans Communications Company Profile

Sequans Communications S.A., together with its subsidiaries, engages in fabless designing, developing, and supplying 4G LTE semiconductor solutions for wireless broadband applications. Its solutions incorporate baseband processor and radio frequency (RF) transceiver integrated circuits along with proprietary signal processing techniques, algorithms, and software stacks. The company offers baseband solutions used to encode and decode data based on 4G protocols that serve as the wireless processing platform for a 4G device; RF transceivers used to transmit and receive wireless transmissions; and system-on-chip solutions that integrate the baseband and RF transceiver functions. Its solutions serves as the wireless communications platform in various devices, including smartphones; USB dongles; portable routers; embedded wireless modems for computing and multimedia devices; and customer-premises equipment, such as fixed wireless broadband access modems, routers, and residential gateways. The company serves OEMs, ODMs, contract manufacturers, or system integrators, as well as distributors who provide customer communications, logistics, and support functions. It operates in the Asia-Pacific region, including Taiwan, China, South Korea, and Japan; India; Europe; the Middle East; and North and South America. Sequans Communications S.A. was founded in 2003 and is headquartered in Paris, France.

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