Inphi (NYSE: IPHI) and MagnaChip Semiconductor (NYSE:MX) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Volatility and Risk
Inphi has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, MagnaChip Semiconductor has a beta of -0.29, suggesting that its share price is 129% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Inphi and MagnaChip Semiconductor, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Inphi currently has a consensus price target of $45.00, indicating a potential upside of 17.89%. MagnaChip Semiconductor has a consensus price target of $13.00, indicating a potential upside of 23.22%. Given MagnaChip Semiconductor’s higher probable upside, analysts clearly believe MagnaChip Semiconductor is more favorable than Inphi.
This table compares Inphi and MagnaChip Semiconductor’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
89.5% of MagnaChip Semiconductor shares are owned by institutional investors. 3.6% of Inphi shares are owned by insiders. Comparatively, 3.8% of MagnaChip Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Inphi and MagnaChip Semiconductor’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Inphi||$266.28 million||6.10||$99.45 million||($1.36)||-28.07|
|MagnaChip Semiconductor||$687.97 million||0.52||-$29.61 million||($0.46)||-22.93|
Inphi has higher earnings, but lower revenue than MagnaChip Semiconductor. Inphi is trading at a lower price-to-earnings ratio than MagnaChip Semiconductor, indicating that it is currently the more affordable of the two stocks.
Inphi Corporation is a provider of analog and mixed signal semiconductor solutions for the communications and datacenter markets. The Company’s solutions provide an interface between analog signals and digital information in systems, such as telecommunications transport systems, enterprise networking equipment and datacenters. It is engaged in the design, development and sale of analog connectivity components that operate to maintain, amplify and manage signal integrity at high speeds in a range of applications. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks and enable the rollout of communications and datacenter infrastructures. The Company provides 25 gigabit (G) to 600G high-speed analog semiconductor solutions for the communications market. As of December 31, 2016, the Company’s product portfolio included products that had commercially shipped, products for which the Company had shipped engineering samples and products under development.
About MagnaChip Semiconductor
MagnaChip Semiconductor Corporation is a designer and manufacturer of analog and mixed-signal semiconductor products for consumer, computing, communication, industrial, automotive and Internet of Things (IoT) applications. The Company provides technology platforms for analog, mixed signal, power, high voltage, non-volatile memory and Radio Frequency (RF) applications. The Company has two segments: Foundry Services Group and Standard Products Group. The Company’s Foundry Services Group provides analog and mixed-signal foundry services to semiconductor companies and Integrated Device Manufacturers (IDMs) that serve consumer, computing, communication, industrial, automotive and IoT applications. The Company manufactures wafers-based on its customers’ product designs. The Company’s Standard Products Group includes its Display Solutions and Power Solutions business lines.
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