AXT (NASDAQ: AXTI) and Sunedison Semiconductor (NASDAQ:SEMI) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Analyst Recommendations

This is a summary of recent ratings and target prices for AXT and Sunedison Semiconductor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AXT 0 1 4 0 2.80
Sunedison Semiconductor 0 4 0 0 2.00

AXT presently has a consensus price target of $8.90, suggesting a potential upside of 14.84%. Sunedison Semiconductor has a consensus price target of $12.00, suggesting a potential upside of 0.42%. Given AXT’s stronger consensus rating and higher possible upside, research analysts clearly believe AXT is more favorable than Sunedison Semiconductor.

Insider and Institutional Ownership

55.3% of AXT shares are held by institutional investors. Comparatively, 63.0% of Sunedison Semiconductor shares are held by institutional investors. 6.9% of AXT shares are held by company insiders. Comparatively, 1.9% of Sunedison Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares AXT and Sunedison Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AXT 8.15% 4.80% 4.27%
Sunedison Semiconductor -13.19% -24.50% -10.80%

Earnings and Valuation

This table compares AXT and Sunedison Semiconductor’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AXT $86.31 million 3.44 $13.43 million $0.20 38.75
Sunedison Semiconductor N/A N/A N/A ($5.28) -2.26

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

Risk and Volatility

AXT has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Sunedison Semiconductor has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Summary

AXT beats Sunedison Semiconductor on 9 of the 11 factors compared between the two stocks.

About AXT

AXT, Inc. (AXT) is a developer and producer of compound and single element semiconductor substrates, also known as wafers. The dominant substrates used in producing semiconductor chips and other electronic circuits are made from silicon. The Company is engaged in the design, development, manufacture and distribution of compound semiconductor substrates and sale of materials. The Company provides alternative or specialty materials in the form of substrates or wafers, including compound and single element substrates. Its compound substrates combine indium with phosphorous (InP) or gallium with arsenic (GaAs). Its single element substrates are made from germanium (Ge). The Company uses its Vertical Gradient Freeze (VGF) technique for growing single crystal Indium Phosphide (InP), Gallium Arsenide (GaAs) and Germanium (Ge) ingots used to produce wafers for diverse electronic and optoelectronic device and circuit applications.

About Sunedison Semiconductor

SunEdison Semiconductor Limited is engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors.

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