Intermolecular (NASDAQ: IMI) and Nova Measuring Instruments (NASDAQ:NVMI) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Intermolecular and Nova Measuring Instruments, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intermolecular 0 1 0 0 2.00
Nova Measuring Instruments 0 0 3 0 3.00

Nova Measuring Instruments has a consensus target price of $27.67, indicating a potential upside of 17.53%. Given Nova Measuring Instruments’ stronger consensus rating and higher possible upside, analysts clearly believe Nova Measuring Instruments is more favorable than Intermolecular.

Valuation and Earnings

This table compares Intermolecular and Nova Measuring Instruments’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Intermolecular $39.08 million 1.18 -$5.32 million ($0.38) -2.44
Nova Measuring Instruments $204.83 million 3.18 $53.74 million $1.07 22.00

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

Institutional and Insider Ownership

38.9% of Intermolecular shares are held by institutional investors. Comparatively, 39.4% of Nova Measuring Instruments shares are held by institutional investors. 15.2% of Intermolecular shares are held by insiders. Comparatively, 1.0% of Nova Measuring Instruments shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Intermolecular and Nova Measuring Instruments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intermolecular -47.22% -43.57% -35.71%
Nova Measuring Instruments 14.79% 26.03% 20.77%

Volatility and Risk

Intermolecular has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Nova Measuring Instruments has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Summary

Nova Measuring Instruments beats Intermolecular on 11 of the 13 factors compared between the two stocks.

Intermolecular Company Profile

Intermolecular, Inc. provides thin film solutions. The Company’s high productivity combinatorial (HPC) platform, which consists of its tempus processing tools, its automated characterization methods, and its Informatics analysis software, is purpose-built for research and development (R&D) using combinatorial process systems. It develops technology and Internet protocol (IP) rights focused on materials, processes, integration and device architectures in collaboration with its customers. Its HPC platform consists of tempus HPC processing, automated characterization and informatics and analysis software. The Company offers a series of wet processing tools and dry processing tools. Its informatics software includes workflow management software, analysis and reporting software, security and collaboration management software, and integration services. It caters to semiconductor device, semiconductor materials and equipment and clean energy market companies.

Nova Measuring Instruments Company Profile

Nova Measuring Instruments Ltd. provides metrology solutions for the semiconductor manufacturing industry. The Company offers in-line Optical and x-ray stand-alone metrology systems, as well as integrated optical metrology systems, which are attached directly to wafer fabrication process equipment. Its metrology systems measure various film thickness and composition properties, as well as critical-dimension (CD) variables during various front-end and back-end of line steps in the semiconductor wafer fabrication process. Its product portfolio includes a set of in-situ, integrated and stand-alone metrology platforms suited for dimensional, films and material metrology measurements for process control across multiple semiconductor manufacturing process steps. Its products include NovaScan 2040, NovaScan 3090Next, Nova i500, Nova T500, Nova T600, Nova V2600 TSV metrology system, NovaMars, Nova Hybrid Metrology solution, Nova Fleet Management, VeraFlex II, VeraFlex III XF and QED.

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