Financial Comparison: Sono-Tek (NASDAQ:SOTK) vs. GCT Semiconductor (NYSE:GCTS)

Sono-Tek (NASDAQ:SOTK) and GCT Semiconductor (NYSE:GCTS) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

47.9% of Sono-Tek shares are owned by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are owned by institutional investors. 5.5% of Sono-Tek shares are owned by insiders. Comparatively, 5.4% of GCT Semiconductor shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Sono-Tek and GCT Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sono-Tek	1	2	0	1	2.25
GCT Semiconductor	2	0	1	0	1.67

Sono-Tek presently has a consensus target price of $7.50, indicating a potential upside of 63.04%. GCT Semiconductor has a consensus target price of $5.00, indicating a potential upside of 271.75%. Given GCT Semiconductor’s higher possible upside, analysts plainly believe GCT Semiconductor is more favorable than Sono-Tek.

Risk and Volatility

Sono-Tek has a beta of -0.21, meaning that its share price is 121% less volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sono-Tek and GCT Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sono-Tek	$20.61 million	3.51	$1.27 million	$0.10	46.00
GCT Semiconductor	$9.13 million	8.23	-$12.38 million	($0.68)	-1.98

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

Profitability

This table compares Sono-Tek and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sono-Tek	7.33%	8.38%	6.41%
GCT Semiconductor	-536.79%	N/A	-168.01%

Summary

Sono-Tek beats GCT Semiconductor on 11 of the 15 factors compared between the two stocks.

About Sono-Tek

Sono-Tek Corporation designs and manufactures ultrasonic coating systems for applying on parts and components for the microelectronics/electronics, alternative energy, medical, industrial, and research and development/other markets worldwide. The company also designs and manufactures custom-engineered ultrasonic coating systems; and provides nozzles and generators for manufacturers' equipment. Its products include integrated multi-axis coating systems, integrated coating systems, fluxing systems, OEM systems, and other related systems. In addition, the company provides surface coating solutions and application consulting services. It markets and distributes its products through direct sales personnel, select independent distributors, and sales representatives. The company was incorporated in 1975 and is based in Milton, New York.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.