Semtech Corporation (NASDAQ: SMTC) and Inphi Corporation (NYSE:IPHI) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Valuation and Earnings

This table compares Semtech Corporation and Inphi Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Semtech Corporation $556.93 million 4.24 $112.89 million $0.95 37.79
Inphi Corporation $329.67 million 4.62 $70.48 million $1.59 22.67

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

Risk and Volatility

Semtech Corporation has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Inphi Corporation has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Insider and Institutional Ownership

95.1% of Semtech Corporation shares are owned by institutional investors. 2.1% of Semtech Corporation shares are owned by insiders. Comparatively, 4.2% of Inphi Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Semtech Corporation and Inphi Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semtech Corporation 0 1 6 0 2.86
Inphi Corporation 0 1 10 1 3.00

Semtech Corporation presently has a consensus target price of $43.50, suggesting a potential upside of 21.17%. Inphi Corporation has a consensus target price of $43.88, suggesting a potential upside of 21.71%. Given Inphi Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Inphi Corporation is more favorable than Semtech Corporation.

Profitability

This table compares Semtech Corporation and Inphi Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semtech Corporation 11.00% 11.77% 7.06%
Inphi Corporation 21.98% 9.77% 4.61%

Summary

Inphi Corporation beats Semtech Corporation on 8 of the 15 factors compared between the two stocks.

Semtech Corporation Company Profile

Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.

Inphi Corporation Company Profile

Inphi Corporation is a provider of analog and mixed signal semiconductor solutions for the communications and datacenter markets. The Company’s solutions provide an interface between analog signals and digital information in systems, such as telecommunications transport systems, enterprise networking equipment and datacenters. It is engaged in the design, development and sale of analog connectivity components that operate to maintain, amplify and manage signal integrity at high speeds in a range of applications. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks and enable the rollout of communications and datacenter infrastructures. The Company provides 25 gigabit (G) to 600G high-speed analog semiconductor solutions for the communications market. As of December 31, 2016, the Company’s product portfolio included products that had commercially shipped, products for which the Company had shipped engineering samples and products under development.

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