Axcelis Technologies (NASDAQ: ACLS) and Energy Recovery (NASDAQ:ERII) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Axcelis Technologies and Energy Recovery, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axcelis Technologies 0 1 5 0 2.83
Energy Recovery 0 0 6 0 3.00

Axcelis Technologies presently has a consensus target price of $32.00, indicating a potential upside of 56.48%. Energy Recovery has a consensus target price of $16.00, indicating a potential upside of 97.04%. Given Energy Recovery’s stronger consensus rating and higher probable upside, analysts clearly believe Energy Recovery is more favorable than Axcelis Technologies.

Valuation and Earnings

This table compares Axcelis Technologies and Energy Recovery’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Axcelis Technologies $410.56 million 1.60 $126.95 million $1.48 13.82
Energy Recovery $63.16 million 6.88 $12.35 million $0.07 116.00

Axcelis Technologies has higher revenue and earnings than Energy Recovery. Axcelis Technologies is trading at a lower price-to-earnings ratio than Energy Recovery, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Axcelis Technologies has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Energy Recovery has a beta of 5.29, suggesting that its share price is 429% more volatile than the S&P 500.

Profitability

This table compares Axcelis Technologies and Energy Recovery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Axcelis Technologies 29.46% 17.71% 12.46%
Energy Recovery 22.35% 6.13% 3.08%

Institutional & Insider Ownership

85.4% of Axcelis Technologies shares are owned by institutional investors. Comparatively, 38.1% of Energy Recovery shares are owned by institutional investors. 3.3% of Axcelis Technologies shares are owned by insiders. Comparatively, 23.8% of Energy Recovery shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Axcelis Technologies Company Profile

Axcelis Technologies, Inc. designs, manufactures, and services ion implantation and other processing equipment used in the fabrication of semiconductor chips worldwide. The company offers a line of high energy, high current, and medium current implanters for various application requirements. It also provides dry strip equipment, curing systems, and thermal processing systems. In addition, the company offers aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services, and customer training. It sells its equipment and services to semiconductor chip manufacturers through its direct sales force. The company was founded in 1995 and is headquartered in Beverly, Massachusetts.

Energy Recovery Company Profile

Energy Recovery, Inc. provides energy solutions to industrial fluid flow markets under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, AT, AquaBold, VorTeq, MTeq, IsoBoost, and IsoGen names worldwide. The company operates through Water and Oil & Gas segments. It offers pressure exchanger energy recovery devices for water desalination plants; hydraulic turbochargers for low-pressure brackish, high-pressure seawater reverse osmosis systems, and other water treatment applications; and high-pressure and circulation pumps for low and high-pressure reverse osmosis systems. The company also provides VorTeq solutions for hydraulic fracturing applications; MTeq solutions for mud pumping applications; IsoBoost systems, such as hydraulic turbo chargers, and related controls and automation systems; and IsoGen systems, including hydraulic turbines, and related controls and automation systems. It serves engineering, procurement, and construction (EPC) firms that design and build large desalination plants; original equipment manufacturers; oil companies; exploration and production companies; oilfield service companies; and EPC firms, which design and build oil and gas processing plants. The company markets its products through its direct sales channels and independent sales agents. Energy Recovery, Inc. was founded in 1992 and is headquartered in San Leandro, California.

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