Comparing Plexus (PLXS) and Inphi (IPHI)

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

Risk and Volatility

Plexus has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Inphi has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Earnings and Valuation

This table compares Plexus and Inphi’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Plexus $2.53 billion 0.82 $112.06 million $3.24 19.10
Inphi $266.28 million 6.26 $99.45 million ($1.36) -28.83

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

Institutional and Insider Ownership

93.6% of Plexus shares are held by institutional investors. 3.7% of Plexus shares are held by company insiders. Comparatively, 3.6% of Inphi 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 Plexus and Inphi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plexus 4.43% 11.48% 6.05%
Inphi -16.27% 7.79% 3.55%

Analyst Ratings

This is a summary of current ratings and price targets for Plexus and Inphi, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plexus 0 6 1 0 2.14
Inphi 0 3 10 0 2.77

Plexus currently has a consensus target price of $57.86, suggesting a potential downside of 6.49%. Inphi has a consensus target price of $45.00, suggesting a potential upside of 14.77%. Given Inphi’s stronger consensus rating and higher probable upside, analysts clearly believe Inphi is more favorable than Plexus.

Summary

Plexus beats Inphi on 8 of the 14 factors compared between the two stocks.

About Plexus

Plexus Corp. (Plexus) and its subsidiaries are engaged in the electronic manufacturing services (EMS) industry. The Company delivers end-to-end solutions for customers in the Americas (AMER), Europe, Middle East, and Africa (EMEA) and Asia-Pacific (APAC) regions. The Company’s segments are AMER, APAC and EMEA. The Company’s customer-focused solutions model integrates product conceptualization, design, commercialization, manufacturing, fulfillment and sustaining solutions. The Company delivers solutions to its customers through its product realization value stream. The Company provides a range of aftermarket services, including complex repair, refurbishment and product support for products it manufactures. The Company provides customer service to approximately 140 branded product companies in the healthcare/life sciences, industrial/commercial, networking/communications and defense/security/aerospace market sectors.

About Inphi

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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