Critical Review: Ambarella (NASDAQ:AMBA) and Ichor (NASDAQ:ICHR)

Ichor (NASDAQ:ICHR) and Ambarella (NASDAQ:AMBA) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ichor	$849.04 million	1.30	-$42.99 million	($0.65)	-50.38
Ambarella	$226.47 million	13.49	-$169.42 million	($3.86)	-18.99

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ichor	-2.45%	-1.38%	-0.99%
Ambarella	-62.38%	-23.52%	-19.93%

Analyst Recommendations

This is a summary of recent ratings and price targets for Ichor and Ambarella, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ichor	0	2	4	1	2.86
Ambarella	0	4	8	0	2.67

Ichor presently has a consensus price target of $42.29, suggesting a potential upside of 29.12%. Ambarella has a consensus price target of $85.42, suggesting a potential upside of 16.55%. Given Ichor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ichor is more favorable than Ambarella.

Institutional and Insider Ownership

94.8% of Ichor shares are held by institutional investors. Comparatively, 82.1% of Ambarella shares are held by institutional investors. 2.2% of Ichor shares are held by insiders. Comparatively, 5.7% of Ambarella shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Ichor has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, Ambarella has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.

Summary

Ichor beats Ambarella on 11 of the 15 factors compared between the two stocks.

About Ichor

Ichor Holdings, Ltd. engages in the design, engineering, and manufacture of fluid delivery subsystems and components for semiconductor capital equipment in the United States and internationally. It primarily offers gas and chemical delivery systems and subsystems that are used in the manufacturing of semiconductor devices. The company's gas delivery subsystems deliver, monitor, and control gases used in semiconductor manufacturing processes, such as etch and deposition; and chemical delivery subsystems blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes comprising chemical-mechanical planarization, electroplating, and cleaning. In addition, it manufactures precision machined components, weldments, electron beam, laser-welded components, precision vacuum and hydrogen brazing, surface treatment technologies, and other proprietary products. The company primarily markets its products to equipment OEMs in the semiconductor equipment market in Japan. Ichor Holdings, Ltd. was incorporated in 1999 and is headquartered in Fremont, California.

About Ambarella

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.