Contrasting Valens Semiconductor (NYSE:VLN) & Magnachip Semiconductor (NYSE:MX)

Magnachip Semiconductor (NYSE:MXGet Rating) and Valens Semiconductor (NYSE:VLNGet Rating) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

This table compares Magnachip Semiconductor and Valens Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magnachip Semiconductor 15.94% 11.34% 8.81%
Valens Semiconductor -37.55% -12.61% -11.24%

Risk & Volatility

Magnachip Semiconductor has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Insider and Institutional Ownership

68.4% of Magnachip Semiconductor shares are held by institutional investors. Comparatively, 28.4% of Valens Semiconductor shares are held by institutional investors. 4.1% of Magnachip Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Magnachip Semiconductor and Valens Semiconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magnachip Semiconductor $474.23 million 1.11 $56.71 million $1.48 7.95
Valens Semiconductor $70.68 million 5.43 -$26.53 million ($1.17) -3.34

Magnachip Semiconductor has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than Magnachip Semiconductor, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Magnachip Semiconductor and Valens Semiconductor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magnachip Semiconductor 0 0 2 0 3.00
Valens Semiconductor 0 0 6 0 3.00

Magnachip Semiconductor currently has a consensus target price of $25.00, suggesting a potential upside of 112.40%. Valens Semiconductor has a consensus target price of $10.40, suggesting a potential upside of 165.98%. Given Valens Semiconductor’s higher probable upside, analysts plainly believe Valens Semiconductor is more favorable than Magnachip Semiconductor.

Summary

Magnachip Semiconductor beats Valens Semiconductor on 10 of the 13 factors compared between the two stocks.

About Magnachip Semiconductor

(Get Rating)

Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, notebook PCs, monitors and liquid crystal displays, and micro light-emitting diode (LED) televisions. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bike, photovoltaic inverter, LED lighting, motor drive, and home appliances; and organic light-emitting diode display driver integrated circuits for OLED TVs. It serves consumer, computing, and industrial electronics original equipment manufacturers, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in Korea, the Asia Pacific, the United States, Europe, and internationally. The company sells its products through a direct sales force, as well as through a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2004 and is based in Luxembourg, Luxembourg.

About Valens Semiconductor

(Get Rating)

Valens Semiconductor Ltd. engages in the provision of semiconductor products that enables high-speed video and data transmission for the audio-video and automotive industries. It offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. The company offers audio-video solutions for the enterprise, education, digital signage, medical and residential, and industrial markets; and automotive solutions, which provide chipsets that support advanced driver-assistance systems, automated driving systems, infotainment, telecommunications, and basic connectivity. It serves customers through distributors and representatives in Israel, China, Hong Kong, the United States, Mexico, Japan, and internationally. The company was incorporated in 2006 and is headquartered in Hod Hasharon, Israel.

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