The shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI) and Antero Resources Corporation (NYSE:AR) were among the active stocks of the last trading sessions. Applied Optoelectronics, Inc. (NASDAQ:AAOI) soared to 11.97% closing at the price of $21.7 whereas the shares of Antero Resources Corporation (NYSE:AR) declined -2.08% with the decrease of -0.35 points closing at the price of $16.44. Applied Optoelectronics, Inc. has currently decrease -31.72% in its stock over the period of 6-months while its rival Antero Resources Corporation subtracted -10.99% 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 Applied Optoelectronics, Inc. (NASDAQ:AAOI) is 18.6% while the ROI of Antero Resources Corporation (NYSE:AR) is 11.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AAOI’s EBITDA Margin is 6.49 whereas AR’s is 7.8.
Both the profitability ratios suggest a mixed sentiment for Applied Optoelectronics, Inc. (NASDAQ:AAOI) and Antero Resources Corporation (NYSE:AR).
EPS & Surprise Factor
Applied Optoelectronics, Inc. (NASDAQ:AAOI) reported $0.14/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.02/share Thus beating the analyst Estimates with a Surprise Factor of 800 Percent. While, Antero Resources Corporation (NYSE:AR) reported EPS of $0.24/share in the last quarter. The analysts projected EPS of $0.22/share depicting a Surprise of 9.1 Percent.
Taking a look at Earnings per Share, Applied Optoelectronics, Inc. tends to be beating the analyst estimates more than Antero Resources Corporation. so AAOI is more profitable than AR.
Technical Analysis of Applied Optoelectronics, Inc. & Antero Resources Corporation
Moving average convergence divergence (MACD) shows that Applied Optoelectronics, Inc. (NASDAQ:AAOI) is on a PRICE RELATIVITY trend While Antero Resources Corporation (NYSE:AR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Applied Optoelectronics, Inc. was in BULLISH territory and Antero Resources Corporation was in BULLISH territory.
AAOI’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While AR’s candle is BEARISH with HIGH.
EPS Growth Rate: AAOI’s 13% versus AR’s 47.33%
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 Applied Optoelectronics, Inc. (NASDAQ:AAOI) is predicted at 13% while Antero Resources Corporation (NYSE:AR) stands at 47.33%. These numbers suggest that AR 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 AAOI stands at 3.2 while AR is at 1.1 whereas the debt ratio of the prior is 0.18 while the debt ratio of the later is 0.69.
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 2.9 for AAOI and 2.2 for AR which means AAOI has Hold rating whereas AR 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 AAOI is $29.19 which is 25.66% of its current price while AR has price target of 24.84 which is 33.82% 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.
AAOI currently has price to earning P/E ratio of 15 whereas AR has 8.13 while the forward P/E ratio for the prior stands at 9.65 and for the later it depicts the value of 8.77.
The price to Book P/B for AAOI is 1.24, Price to Sale is at 1.31 and for AR these ratios stand at 0.66 and 1.32.