Reviewing Magnachip Semiconductor (NYSE:MX) & Penguin Solutions (NASDAQ:PENG)

Magnachip Semiconductor (NYSE:MX) and Penguin Solutions (NASDAQ:PENG) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Volatility and Risk

Magnachip Semiconductor has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Penguin Solutions has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Valuation & Earnings

This table compares Magnachip Semiconductor and Penguin Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnachip Semiconductor	$231.74 million	0.62	-$36.62 million	($1.44)	-2.68
Penguin Solutions	$1.24 billion	0.76	-$52.47 million	($0.52)	-33.75

Magnachip Semiconductor has higher earnings, but lower revenue than Penguin Solutions. Penguin Solutions 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 current recommendations and price targets for Magnachip Semiconductor and Penguin Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnachip Semiconductor	0	1	2	0	2.67
Penguin Solutions	0	0	6	2	3.25

Magnachip Semiconductor presently has a consensus price target of $7.00, suggesting a potential upside of 81.49%. Penguin Solutions has a consensus price target of $25.43, suggesting a potential upside of 44.89%. Given Magnachip Semiconductor’s higher possible upside, analysts plainly believe Magnachip Semiconductor is more favorable than Penguin Solutions.

Profitability

This table compares Magnachip Semiconductor and Penguin Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magnachip Semiconductor	-20.08%	-14.31%	-10.89%
Penguin Solutions	-2.21%	11.70%	3.12%

Institutional & Insider Ownership

74.3% of Magnachip Semiconductor shares are owned by institutional investors. 4.5% of Magnachip Semiconductor shares are owned by insiders. Comparatively, 2.6% of Penguin Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

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

About Magnachip Semiconductor

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, computing, 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, monitors, notebook PCs, tablet PC and TVs applied with liquid crystal display, organic light emitting diodes (OLED), and micro light emitting diode (Micro LED) panel. 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-bikes, photovoltaic inverters, LED lighting, and motor drives; and OLED display driver integrated circuit products. It serves consumer, computing, communication, automotive and industrial electronics OEMs, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in the Asia Pacific, the United States, and Europe. 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 2003 and is based in Cheongju-si, South Korea.

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.