Contrasting Arteris (NASDAQ:AIP) & AppLovin (NASDAQ:APP)

AppLovin (NASDAQ:APP) and Arteris (NASDAQ:AIP) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Institutional & Insider Ownership

41.9% of AppLovin shares are owned by institutional investors. Comparatively, 64.4% of Arteris shares are owned by institutional investors. 12.8% of AppLovin shares are owned by insiders. Comparatively, 23.3% of Arteris shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

AppLovin has a beta of 2.49, indicating that its share price is 149% more volatile than the S&P 500. Comparatively, Arteris has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Profitability

This table compares AppLovin and Arteris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AppLovin	64.58%	193.10%	59.63%
Arteris	-46.70%	-295.96%	-22.26%

Analyst Recommendations

This is a breakdown of recent recommendations for AppLovin and Arteris, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppLovin	0	8	13	3	2.79
Arteris	1	0	6	0	2.71

AppLovin currently has a consensus price target of $529.39, suggesting a potential upside of 70.36%. Arteris has a consensus price target of $39.43, suggesting a potential upside of 65.04%. Given AppLovin’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AppLovin is more favorable than Arteris.

Earnings and Valuation

This table compares AppLovin and Arteris”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppLovin	$5.48 billion	18.97	$3.33 billion	$13.01	23.89
Arteris	$70.58 million	16.64	-$34.75 million	($0.87)	-27.46

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

Summary

AppLovin beats Arteris on 13 of the 15 factors compared between the two stocks.

About AppLovin

AppLovin Corporation engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content in the United States and internationally. It operates through two segments, Software Platform and Apps. The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; MAX, an in-app bidding software that optimizes the value of a publisher's advertising inventory by running a real-time competitive auction; Adjust, a measurement and analytics marketing platform that provides marketers with the visibility, insights, and tools needed to grow their apps from early stage to maturity; and Wurl, a connected TV platform, which distributes streaming video for content companies and provides advertising and publishing solutions through its AdPool, ContentDiscovery, and Global FAST Pass products. It also offers SparkLabs, which uses app store optimization to enhance ad visibility; AppLovin Exchange, which connects buyers to mobile and CTV devices through a single and direct RTB exchange; and Array, an end-to-end app management suite for mobile operators and end users. In addition, the company operates various free-to-play mobile games. It serves individuals, small and independent businesses, enterprises, advertisers and advertising networks, mobile app publishers, indie studio developers, and internet platforms. AppLovin Corporation was incorporated in 2011 and is headquartered in Palo Alto, California.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.