Critical Analysis: Synaptics (NASDAQ:SYNA) & Nova (NASDAQ:NVMI)

Nova (NASDAQ:NVMI) and Synaptics (NASDAQ:SYNA) are both mid-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Volatility & Risk

Nova has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Synaptics has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500.

Insider & Institutional Ownership

83.0% of Nova shares are held by institutional investors. Comparatively, 99.4% of Synaptics shares are held by institutional investors. 1.0% of Nova shares are held by company insiders. Comparatively, 0.5% of Synaptics shares are held by company 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Nova and Synaptics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nova	0	3	5	0	2.63
Synaptics	1	1	8	2	2.92

Nova currently has a consensus price target of $311.67, indicating a potential downside of 2.65%. Synaptics has a consensus price target of $87.88, indicating a potential upside of 15.92%. Given Synaptics’ stronger consensus rating and higher possible upside, analysts plainly believe Synaptics is more favorable than Nova.

Profitability

This table compares Nova and Synaptics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nova	28.73%	24.09%	15.03%
Synaptics	-4.08%	4.35%	2.36%

Valuation & Earnings

This table compares Nova and Synaptics”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nova	$852.72 million	11.04	$183.76 million	$7.65	41.85
Synaptics	$1.11 billion	2.66	-$47.80 million	($1.16)	-65.35

Nova has higher earnings, but lower revenue than Synaptics. Synaptics is trading at a lower price-to-earnings ratio than Nova, indicating that it is currently the more affordable of the two stocks.

Summary

Nova beats Synaptics on 9 of the 15 factors compared between the two stocks.

About Nova

Nova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.

About Synaptics

Synaptics Incorporated develops, markets, and sells semiconductor products worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes, over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in notebook personal computers (PCs), PC peripherals, automobiles, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.