Financial Contrast: Echelon (ELON) and Lantronix (LTRX)

Echelon (NASDAQ: ELON) and Lantronix (NASDAQ:LTRX) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

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This is a summary of current ratings for Echelon and Lantronix, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Echelon	0	0	0	0	N/A
Lantronix	0	0	0	0	N/A

Insider and Institutional Ownership

25.9% of Echelon shares are held by institutional investors. Comparatively, 14.9% of Lantronix shares are held by institutional investors. 13.0% of Echelon shares are held by company insiders. Comparatively, 52.4% of Lantronix shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Echelon and Lantronix’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Echelon	$31.67 million	0.63	-$4.62 million	($1.04)	-4.22
Lantronix	$44.73 million	1.33	-$270,000.00	N/A	N/A

Lantronix has higher revenue and earnings than Echelon.

Profitability

This table compares Echelon and Lantronix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Echelon	-15.15%	-21.24%	-15.49%
Lantronix	-0.28%	4.78%	3.28%

Volatility and Risk

Echelon has a beta of -0.74, meaning that its share price is 174% less volatile than the S&P 500. Comparatively, Lantronix has a beta of -0.13, meaning that its share price is 113% less volatile than the S&P 500.

Summary

Lantronix beats Echelon on 9 of the 10 factors compared between the two stocks.

Echelon Company Profile

Echelon Corporation develops, markets, and sells embedded components, modules, edge servers, and software. The company offers chips, gateways, and design and management software to original equipment manufacturers under the LONWORKS and IzoT brands. It also provides a range of control networking solutions under the LumInsight and Lumewave by Echelon brands that consist of wired and wireless control nodes; smart gateways for interconnecting the control nodes; and a software-based Central Management System, which is used for startup, commissioning, management, and monitoring of the lighting network. The company markets its products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific/Japan through direct sales organization, third-party electronics representatives, value-added resellers, and distributors. Echelon Corporation was founded in 1988 and is headquartered in Santa Clara, California.

Lantronix Company Profile

Lantronix, Inc. provides secure data access and management solutions for Internet of Things (IoT) assets in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan. The company's IoT products include IoT gateways, which provide secure connectivity and the ability to add integrated device management and advanced data access features; and IoT building blocks that offer basic secure machine connectivity and unmanaged data access. It also offers information technology (IT) management products, which comprise console management, power management, and keyboard video mouse products that offer remote access to IT and networking infrastructure deployed in test labs, data centers, and server rooms; and xPrintServer. The company provides its IT management product line and external IoT solutions through value added resellers, systems integrators, distributors, consumers, online retailers, IT resellers, corporate customers, and government entities, e-tailers, original design manufacturers, and original equipment manufacturers. Lantronix, Inc. was founded in 1989 and is headquartered in Irvine, California.