Contrasting Wolfspeed (NYSE:WOLF) & Ambarella (NASDAQ:AMBA)

Wolfspeed (NYSE:WOLFGet Free Report) and Ambarella (NASDAQ:AMBAGet Free Report) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Wolfspeed and Ambarella, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wolfspeed 1 9 4 0 2.21
Ambarella 1 4 7 0 2.50

Wolfspeed presently has a consensus target price of $36.29, indicating a potential upside of 34.69%. Ambarella has a consensus target price of $71.08, indicating a potential upside of 41.18%. Given Ambarella’s stronger consensus rating and higher possible upside, analysts clearly believe Ambarella is more favorable than Wolfspeed.

Profitability

This table compares Wolfspeed and Ambarella’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wolfspeed -96.12% -27.37% -4.78%
Ambarella -74.81% -23.78% -20.46%

Valuation and Earnings

This table compares Wolfspeed and Ambarella’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wolfspeed $921.90 million 3.68 -$329.90 million ($6.46) -4.17
Ambarella $226.47 million 9.11 -$169.42 million ($4.24) -11.88

Ambarella has lower revenue, but higher earnings than Wolfspeed. Ambarella is trading at a lower price-to-earnings ratio than Wolfspeed, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Wolfspeed has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Ambarella has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.

Insider and Institutional Ownership

82.1% of Ambarella shares are held by institutional investors. 0.9% of Wolfspeed shares are held by company insiders. Comparatively, 5.7% of Ambarella shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Ambarella beats Wolfspeed on 11 of the 14 factors compared between the two stocks.

About Wolfspeed

(Get Free Report)

Wolfspeed, Inc. operates as a powerhouse semiconductor company focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, Hong Kong, China, rest of Asia-Pacific, the United States, and internationally. It offers silicon carbide and GaN materials, including silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers to manufacture products for RF, power, and other applications. The company also provides power devices, such as silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), and power modules for customers and distributors to use in applications, including electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, it offers RF devices comprising GaN-based die, high-electron mobility transistors, monolithic microwave integrated circuits, and laterally diffused MOSFET power transistors for telecommunications infrastructure, military, and other commercial applications. The company was formerly known as Cree, Inc. and changed its name to Wolfspeed, Inc. in October 2021. Wolfspeed, Inc. was incorporated in 1987 and is headquartered in Durham, North Carolina.

About Ambarella

(Get Free Report)

Ambarella, Inc. develops semiconductor solutions that enable high-definition (HD) and ultra HD compression, image signal processing, and artificial intelligence processing worldwide. The company's system-on-a-chip designs integrated HD video processing, image processing, artificial intelligence computer vision algorithms, audio processing, and system functions onto a single chip for delivering video and image quality, differentiated functionality, and low power consumption. Its solutions are used in automotive cameras, such as automotive video recorders, electronic mirrors, front advanced driver assistance system camera, cabin monitoring system and driver monitoring system camera, and central domain controllers for autonomous vehicle; enterprise and public class, and home security camera; and robotics and industrial application, including identification/authentication cameras, robotic products, and sensing cameras, as well as cameras for the enterprise, home, public spaces, and consumer leisure comprising wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing, and virtual reality applications. The company sells its solutions to original design manufacturers and original equipment manufacturers through its direct sales force and distributors. Ambarella, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

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