Diodes (NASDAQ: DIOD) and Ambarella (NASDAQ:AMBA) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.
Institutional and Insider Ownership
74.2% of Diodes shares are held by institutional investors. Comparatively, 59.9% of Ambarella shares are held by institutional investors. 7.0% of Diodes shares are held by company insiders. Comparatively, 5.8% of Ambarella shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Diodes and Ambarella’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Diodes||$942.16 million||1.65||$15.93 million||$0.60||52.43|
|Ambarella||$310.30 million||6.25||$57.81 million||$1.54||37.95|
Ambarella has higher revenue, but lower earnings than Diodes. Ambarella is trading at a lower price-to-earnings ratio than Diodes, indicating that it is currently the more affordable of the two stocks.
This table compares Diodes and Ambarella’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Diodes has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Ambarella has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Diodes and Ambarella, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Diodes presently has a consensus target price of $34.50, suggesting a potential upside of 9.66%. Ambarella has a consensus target price of $59.50, suggesting a potential upside of 1.81%. Given Diodes’ higher probable upside, analysts clearly believe Diodes is more favorable than Ambarella.
Ambarella beats Diodes on 10 of the 14 factors compared between the two stocks.
Diodes Company Profile
Diodes Incorporated is a manufacturer and supplier of application-specific standard products within the discrete, logic, analog and mixed-signal semiconductor markets, serving the consumer electronics, computing, communications, industrial and automotive markets. The Company’s products include diodes; rectifiers; transistors; metal-oxide semiconductor field-effect transistors (MOSFETs); protection devices; amplifiers and comparators; Hall-effect and temperature sensors, and power management devices, including light emitting diode (LED) drivers, alternating current (AC)-direct current (DC) and DC-DC switching, linear voltage regulators and voltage references, along with special function devices, such as universal serial bus (USB) power switches, load switches, voltage supervisors and motor controllers. It also holds interests in Pericom Semiconductor Corporation, which designs, develops and markets integrated circuits (ICs) and frequency control products (FCPs).
Ambarella Company Profile
Ambarella, Inc. offers semiconductor processing solutions for video that enable high-definition (HD), video capture, sharing and display. The Company operates through the development and sale of low-power, high-definition video products segment. Its system-on-a-chip designs incorporate HD video processing, image processing, audio processing and system functions onto a single chip. In the camera market, its platform enables the creation of video content in wearable cameras, automotive aftermarket cameras, professional and consumer Internet Protocol (IP), security cameras, telepresence cameras and unmanned aerial vehicles. In the infrastructure market, its solutions manage IP video traffic, broadcast encoding and transcoding, and IP video delivery applications. AmbaClear is its image signal processing architecture. AmbaCast is its HD video processing architecture. It offers the MotorVu 3D 360 degrees Surround View reference design for automotive original equipment manufacturer market.
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