Contrasting LSI Industries (NASDAQ:LYTS) & Picocela (NASDAQ:PCLA)

LSI Industries (NASDAQ:LYTS) and Picocela (NASDAQ:PCLA) are both small-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares LSI Industries and Picocela’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LSI Industries	4.47%	11.25%	7.02%
Picocela	N/A	N/A	N/A

Insider & Institutional Ownership

73.9% of LSI Industries shares are owned by institutional investors. 8.2% of LSI Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares LSI Industries and Picocela”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LSI Industries	$469.64 million	1.24	$24.98 million	$0.77	25.26
Picocela	N/A	N/A	N/A	N/A	N/A

LSI Industries has higher revenue and earnings than Picocela.

Analyst Recommendations

This is a summary of current ratings and target prices for LSI Industries and Picocela, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LSI Industries	0	0	2	0	3.00
Picocela	0	0	0	0	0.00

LSI Industries presently has a consensus price target of $28.00, suggesting a potential upside of 43.98%. Given LSI Industries’ stronger consensus rating and higher possible upside, equities research analysts clearly believe LSI Industries is more favorable than Picocela.

Summary

LSI Industries beats Picocela on 9 of the 9 factors compared between the two stocks.

About LSI Industries

LSI Industries Inc. produces and sells non-residential lighting and retail display solutions in the United States, Canada, Mexico, and Latin America. It operates through two segments, Lighting and Display Solutions. The Lighting segment manufactures, markets, and sells non-residential outdoor and indoor lighting fixture and control solutions in the commercial and industrial markets. This segment also offers lighting control products, including sensors, photocontrols, dimmers, motion detection, and Bluetooth systems to support lighting fixtures; and designs, engineers, and manufactures electronic circuit boards, assemblies, and sub-assemblies. The Display Solutions segment manufactures, sells, and installs exterior and interior visual image and display elements, including printed and structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements. This segments products and services include signage and canopy graphics, pump dispenser graphics, building fascia graphics, decals, interior signage and marketing graphics, aisle markers, wall mural graphics, and refrigerated and non-refrigerated merchandising displays. This segment also provides project management services comprising installation management, site surveys, permitting, and content management; and manages and executes the implementation of large rollout programs. It serves refueling and convenience store, parking lot and garage, quick-service restaurant, retail and grocery store, automotive, warehouse, sports court, and field markets, as well as warehouses. LSI Industries Inc. was founded in 1976 and is headquartered in Cincinnati, Ohio.

About Picocela

We are engaged in the manufacturing, installation, and services for enterprise wireless mesh solutions. We derive our revenues mainly from two sources: (1) sales of product equipment, and (2) SaaS, maintenance and others. Under the first revenue source, we develop mesh Wi-Fi access point devices, PCWL series, adopting our proprietary patented wireless mesh communication technology software PicoCELA Backhaul Engine (“PBE”), which enables wireless Wi-Fi and mesh communication by linking a chain of multiple wireless Wi-Fi access points by radio communication not by cabling. We outsource the manufacturing of PCWL series, our mesh Wi-Fi access point devices incorporating the technology, and sell PCWL series both through distributors and to end customers directly. Under the second revenue source, we provide a cloud portal service in a SaaS model, which enables users to monitor connectivity and communication traffic at each of our mesh Wi-Fi access points. Our cloud portal service also serves as a platform for customers to install their proprietary edge-computing software into our mesh Wi-Fi access point devices. We also license our patented wireless mesh technology to third-party manufacturers which utilize our wireless mesh technology. Our business is geographically concentrated. We operate solely in Japan and generate revenue from this market as of the date of this prospectus. Due to this geographic concentration, our results of operations and financial conditions are subject to greater risks from changes in general economic and other conditions in Japan, than the operations of more geographically diversified competitors. Some of the technologies used in our products are licensed from Kyushu University, and the termination of these licenses could have a material adverse effect on our business. We outsource the manufacturing of all hardware products, PCWL series, and our mesh Wi-Fi access points devices, and are therefore subject to certain risks if our third-party manufacturers do not provide our end-customers with the quality and performance that they expect from our products. As of the date of this prospectus, we maintain a stable relationship with our major manufacturers. While we may have certain contractual remedies against them, if any of our major manufacturers becomes unable or unwilling to continue to manufacture our PCWL series, such remedies may not be sufficient in scope, we may not be able to effectively enforce such remedies, and we may incur significant costs in enforcing such remedies. For the six months ended March 31, 2024 and 2023, we had a total revenue of JPY278,481 thousand (approximately $1,842 thousand), and JPY117,421 thousand, respectively. Revenue generated from the sales of product equipment was JPY231,069 thousand (approximately $1,528 thousand) and JPY83,238 thousand for the six months ended March 31, 2024 and 2023, respectively. Revenue derived from SaaS, maintenance and others was JPY47,412 thousand (approximately $314 thousand) and JPY34,183 thousand for the six months ended March 31, 2024 and 2023, respectively. For the fiscal years ended September 30, 2023 and 2022, we had a total revenue of JPY559,521 thousand (approximately $3,700 thousand), and JPY682,121 thousand, respectively. Revenue generated from the sales of product equipment was JPY465,691 thousand (approximately $3,080 thousand) and JPY540,857 thousand for the fiscal years ended September 2023 and 2022, respectively. Revenue derived from SaaS, maintenance and others was JPY93,830 thousand (approximately $620 thousand) and JPY141,264 thousand for the fiscal years ended September 2023 and 2022, respectively. Our headquarters are located at 2-34-5 Ningyocho, SANOS Building, Nihonbashi, Chuo-ku, Tokyo 103-0013 Japan. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.