The shares of VEON Ltd. (NASDAQ:VEON) and Finisar Corporation (NASDAQ:FNSR) were among the active stocks of the last trading sessions. VEON Ltd. (NASDAQ:VEON) declined to -1.03% closing at the price of $2.87 whereas the shares of Finisar Corporation (NASDAQ:FNSR) declined -1.65% with the decrease of -0.3 points closing at the price of $17.87. VEON Ltd. has currently increase 22.13% in its stock over the period of 6-months while its rival Finisar Corporation added 13.1% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of VEON Ltd. (NASDAQ:VEON) is 4.9% while the ROI of Finisar Corporation (NASDAQ:FNSR) is 1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VEON’s EBITDA Margin is 4.14 whereas FNSR’s is 20.31.
Both the profitability ratios suggest a mixed sentiment for VEON Ltd. (NASDAQ:VEON) and Finisar Corporation (NASDAQ:FNSR).
EPS & Surprise Factor
VEON Ltd. (NASDAQ:VEON) reported $0.01/share EPS for the previous quarter where analysts were predicting an EPS to be $0.05/share Thus lagging the analyst Estimates with a Surprise Factor of -80 Percent. While, Finisar Corporation (NASDAQ:FNSR) reported EPS of $0.18/share in the last quarter. The analysts projected EPS of $0.12/share depicting a Surprise of 50 Percent.
Taking a look at Earnings per Share, Finisar Corporation tends to be beating the analyst estimates more than VEON Ltd.. so FNSR is more profitable than VEON.
Technical Analysis of VEON Ltd. & Finisar Corporation
Moving average convergence divergence (MACD) shows that VEON Ltd. (NASDAQ:VEON) is on a PRICE RELATIVITY trend While Finisar Corporation (NASDAQ:FNSR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the VEON Ltd. was in BEARISH territory and Finisar Corporation was in BEARISH territory.
VEON’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While FNSR’s candle is BEARISH with MEDIUM.
EPS Growth Rate: VEON’s 0% versus FNSR’s 16.5%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of VEON Ltd. (NASDAQ:VEON) is predicted at 0% while Finisar Corporation (NASDAQ:FNSR) stands at 16.5%. These numbers suggest that FNSR is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of VEON stands at 0.6 while FNSR is at 3.6 whereas the debt ratio of the prior is 2.98 while the debt ratio of the later is 0.47.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for VEON and 2.5 for FNSR which means VEON has Hold rating whereas FNSR has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for VEON is $4.25 which is 32.47% of its current price while FNSR has price target of 22.14 which is 19.29% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
VEON currently has price to earning P/E ratio of 0 whereas FNSR has 0 while the forward P/E ratio for the prior stands at 12.53 and for the later it depicts the value of 11.8.
The price to Book P/B for VEON is 1.41, Price to Sale is at 0.55 and for FNSR these ratios stand at 1.29 and 1.67.