Onsemi (NASDAQ:ON) & Penguin Solutions (NASDAQ:PENG) Head-To-Head Analysis

Penguin Solutions (NASDAQ:PENG) and Onsemi (NASDAQ:ON) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

97.7% of Onsemi shares are held by institutional investors. 2.6% of Penguin Solutions shares are held by insiders. Comparatively, 0.3% of Onsemi shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Penguin Solutions has a beta of 2, suggesting that its share price is 100% more volatile than the S&P 500. Comparatively, Onsemi has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500.

Earnings and Valuation

This table compares Penguin Solutions and Onsemi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Penguin Solutions	$1.32 billion	0.71	-$52.47 million	($0.17)	-103.59
Onsemi	$6.67 billion	2.57	$1.57 billion	$1.44	28.46

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

Profitability

This table compares Penguin Solutions and Onsemi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Penguin Solutions	-2.21%	11.70%	3.12%
Onsemi	22.21%	20.10%	12.36%

Analyst Ratings

This is a breakdown of current recommendations for Penguin Solutions and Onsemi, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Penguin Solutions	0	1	6	2	3.11
Onsemi	1	9	13	0	2.52

Penguin Solutions currently has a consensus target price of $24.94, indicating a potential upside of 41.61%. Onsemi has a consensus target price of $54.32, indicating a potential upside of 32.55%. Given Penguin Solutions’ stronger consensus rating and higher probable upside, research analysts plainly believe Penguin Solutions is more favorable than Onsemi.

Summary

Onsemi beats Penguin Solutions on 10 of the 15 factors compared between the two stocks.

About Penguin Solutions

Penguin Solutions, Inc. engages in the designing and development of enterprise solutions worldwide. It operates through three segments: Advanced Computing, Integrated Memory, and Optimized LED. It offers dynamic random access memory modules, solid-state and flash storage, and other advanced integrated memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. The company also provides Penguin Computing that focus on technical computing for core and cloud environments through high-performance computing and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications, such as high-performance products for government, health care, manufacturing, and telecommunications applications. In addition, it offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, the company provides LED chip products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brands. It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. The company was formerly known as SMART Global Holdings, Inc. and changed its name to Penguin Solutions, Inc. in October 2024. Penguin Solutions, Inc. was founded in 1988 and is based in Grand Cayman, Cayman Islands.

About Onsemi

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions. The Advanced Solutions Group segment is involved in the designing and developing of analog, mixed-signal, advanced logic, ASSPs and ASICs, Wi-Fi and power solutions for a broad base of end-users in the automotive, consumer, computing, industrial, communications, medical and aerospace/defense markets. The Intelligent Sensing Group segment is focused on the designing and developing of CMOS and CCD image sensors, as well as proximity sensors, image signal processors, single photon detectors, inclu