Head-To-Head Contrast: ARM (NASDAQ:ARM) versus Credo Technology Group (NASDAQ:CRDO)

Credo Technology Group (NASDAQ:CRDO) and ARM (NASDAQ:ARM) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Earnings and Valuation

This table compares Credo Technology Group and ARM”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credo Technology Group	$1.34 billion	32.61	$472.28 million	$2.48	94.13
ARM	$4.92 billion	60.59	$904.00 million	$0.84	332.24

ARM has higher revenue and earnings than Credo Technology Group. Credo Technology Group is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Credo Technology Group and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credo Technology Group	35.37%	32.30%	28.88%
ARM	18.37%	12.43%	9.48%

Risk and Volatility

Credo Technology Group has a beta of 3.2, meaning that its stock price is 220% more volatile than the S&P 500. Comparatively, ARM has a beta of 3.76, meaning that its stock price is 276% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Credo Technology Group and ARM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credo Technology Group	0	2	15	2	3.00
ARM	1	8	17	0	2.62

Credo Technology Group currently has a consensus target price of $266.17, indicating a potential upside of 14.01%. ARM has a consensus target price of $297.65, indicating a potential upside of 6.66%. Given Credo Technology Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Credo Technology Group is more favorable than ARM.

Institutional & Insider Ownership

80.5% of Credo Technology Group shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 11.8% of Credo Technology Group shares are held 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.

Summary

Credo Technology Group beats ARM on 9 of the 15 factors compared between the two stocks.

About Credo Technology Group

Credo Technology Group Holding Ltd provides various high-speed connectivity Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.