Contrasting A10 Networks (ATEN) and Silicom (SILC)

A10 Networks (NYSE: ATEN) and Silicom (NASDAQ:SILC) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.

Insider & Institutional Ownership

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62.2% of A10 Networks shares are held by institutional investors. Comparatively, 34.8% of Silicom shares are held by institutional investors. 31.6% of A10 Networks shares are held by company insiders. Comparatively, 25.4% of Silicom shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

A10 Networks has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Silicom has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Valuation & Earnings

This table compares A10 Networks and Silicom’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A10 Networks $230.00 million 1.96 -$20.94 million ($0.30) -21.27
Silicom $125.69 million 2.24 $21.71 million N/A N/A

Silicom has lower revenue, but higher earnings than A10 Networks.

Profitability

This table compares A10 Networks and Silicom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A10 Networks -6.94% -17.63% -7.12%
Silicom 17.28% 16.78% 13.73%

Analyst Recommendations

This is a summary of current recommendations and price targets for A10 Networks and Silicom, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A10 Networks 0 2 1 0 2.33
Silicom 0 0 1 0 3.00

A10 Networks currently has a consensus price target of $7.75, indicating a potential upside of 21.47%. Silicom has a consensus price target of $50.00, indicating a potential upside of 34.23%. Given Silicom’s stronger consensus rating and higher probable upside, analysts clearly believe Silicom is more favorable than A10 Networks.

Summary

Silicom beats A10 Networks on 9 of the 12 factors compared between the two stocks.

A10 Networks Company Profile

A10 Networks, Inc. provides software and hardware solutions in the United States, Japan, and internationally. The company's products are built on advanced core operating system platform. It offers application delivery controllers that provide advanced server load balancing; lightning application delivery service, a cloud-native software-as-a-service platform designed to boost the delivery and security of applications and micro services; and carrier grade networking address translation product that offer network address and protocol translation services for service provider networks. The company also provides threat protection systems for the protection of networks and server resources against massive distributed denial of service attacks; secure sockets layer insight that decrypts secure sockets layer-encrypted traffic and forwards it to a third-party security device, such as a firewall, for deep packet inspection; and convergent firewall, which consolidates multiple critical security capabilities in one package by consolidating multiple security and networking functions in a single appliance. Its solutions enable cloud providers, Web-scale companies, service providers, government organizations, and enterprises to secure and optimize the performance of their data center and cloud applications; and secure their users, applications, and infrastructure from Internet, Web, and network threats. The company delivers its solutions on optimized hardware appliances, bare metal software, virtual appliances, and cloud-native software. It serves telecommunications, technology, industrial, retail, financial, gaming, and education industries. The company markets its products through sales organizations, as well as distribution channel partners, including distributors, value added resellers, and system integrators. A10 Networks, Inc. was incorporated in 2004 and is headquartered in San Jose, California.

Silicom Company Profile

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server based systems, and communications devices in North America, Europe, and the Asia Pacific. It offers server networking interface cards with and without bypass for the server networking industry. The company also provides intelligent and programmable cards, including redirector cards; encryption and data compression hardware acceleration cards; time stamping and full field programmable gate array (FPGA) based network capture and mobile OSS distribution solutions; network processor acceleration cards; FPGA based ultra-low latency solutions; and compute blades, which offer general compute capability in networking intensive environment. In addition, it offers bypass switches and intelligent bypass switches; server to appliance converter products that enable standard servers to be configured as network appliances with front networking ports; and CPE/edge/low end appliance units. The company sells its products to original equipment manufacturers. Silicom Ltd. was founded in 1987 and is headquartered in Kfar Sava, Israel.

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