Cirrus Logic (NASDAQ:CRUS) versus AXT (NASDAQ:AXTI) Critical Contrast

Cirrus Logic (NASDAQ:CRUS) and AXT (NASDAQ:AXTI) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Analyst Recommendations

This is a summary of recent ratings for Cirrus Logic and AXT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cirrus Logic	0	2	4	0	2.67
AXT	1	0	4	0	2.60

Cirrus Logic presently has a consensus target price of $123.00, suggesting a potential upside of 6.33%. AXT has a consensus target price of $4.60, suggesting a potential upside of 14.14%. Given AXT’s higher possible upside, analysts plainly believe AXT is more favorable than Cirrus Logic.

Insider & Institutional Ownership

88.0% of Cirrus Logic shares are held by institutional investors. Comparatively, 49.5% of AXT shares are held by institutional investors. 1.2% of Cirrus Logic shares are held by company insiders. Comparatively, 8.8% of AXT shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cirrus Logic and AXT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cirrus Logic	18.15%	18.38%	15.29%
AXT	-27.68%	-11.38%	-7.02%

Volatility and Risk

Cirrus Logic has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, AXT has a beta of 2.26, meaning that its share price is 126% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cirrus Logic and AXT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cirrus Logic	$1.90 billion	3.13	$331.51 million	$6.39	18.10
AXT	$86.08 million	2.16	-$11.62 million	($0.55)	-7.33

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

Summary

Cirrus Logic beats AXT on 10 of the 13 factors compared between the two stocks.

About Cirrus Logic

Cirrus Logic, Inc., a fabless semiconductor company, develops low-power high-precision mixed-signal processing solutions in China, the United States, and internationally. The company offers audio products, including amplifiers; codecs components that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single integrated circuit (IC); smart codecs, a codec with integrated digital signal processing; standalone digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that helps to enhance user experience with features, such as louder, high-fidelity sound, audio playback, voice capture, and hearing augmentation for use in smartphones, tablets, laptops, AR/VR headsets, home theater systems, automotive entertainment systems, and professional audio systems. It also provides high-performance mixed-signal products comprising camera controllers, haptic and sensing solutions, and battery and power ICs for use in smartphones, as well as legacy industrial and energy applications, such as digital utility meters, power supplies, energy control, energy measurement, and energy exploration. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was incorporated in 1984 and is headquartered in Austin, Texas.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.