Financial Analysis: Spansion (CODE) and Exar (EXAR)

Spansion (NYSE: CODE) and Exar (NYSE:EXAR) are both semiconductors – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Valuation and Earnings

This table compares Spansion and Exar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spansion N/A N/A N/A ($1.15) -33.50
Exar N/A N/A N/A $0.18 72.17

Spansion is trading at a lower price-to-earnings ratio than Exar, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Spansion and Exar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spansion 0 0 0 0 N/A
Exar 0 2 1 0 2.33

Exar has a consensus target price of $13.00, suggesting a potential upside of 0.08%. Given Exar’s higher possible upside, analysts clearly believe Exar is more favorable than Spansion.

Profitability

This table compares Spansion and Exar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spansion -7.99% -18.66% -7.19%
Exar 6.30% 2.37% 2.13%

Institutional & Insider Ownership

78.8% of Exar shares are owned by institutional investors. 2.5% of Exar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Exar beats Spansion on 8 of the 8 factors compared between the two stocks.

Spansion Company Profile

Spansion Inc. (Spansion) is a designer, manufacturer and developer of embedded systems solutions. The Company’s embedded systems solutions address a variety of applications, including automotive, consumer electronics, networking and telecommunications equipment, tablets, personal computers (PCs), gaming consoles and industrial equipment with a range of products. The Company has two product groups for embedded applications: flash memory and microcontrollers/analog products. Its flash memory market consists of two architectures: NOR and NAND flash memory. NOR flash memory is used for code execution and storage in consumer electronics, automobiles, communications, gaming and industrial applications. NAND flash memory is used for data storage in applications, such as solid-state drives, removable storage devices and embedded managed NAND devices. The Company focuses on embedded markets, such as transportation, industrial, consumer, communications and gaming markets.

Exar Company Profile

Exar Corporation (Exar) designs, develops and markets analog mixed-signal integrated circuits (ICs) and sub-system solutions. The Company’s products are deployed in a range of applications, such as industrial, instrumentation and medical equipment, networking and telecommunication systems, servers, enterprise storage systems, flat panel displays, light emitting diode (LED) lighting solutions, set top boxes and digital video recorders. Exar’s product portfolio includes connectivity, power management, high performance analog, communications, processors, flat panel display and LED lighting. The Company designs and develops amplifiers and data converters that support a range of signal path and conditioning needs of networking, industrial control and embedded applications. The Company markets its products to three primary markets, such as industrial and embedded systems, consumer and infrastructure.

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