PDF Solutions (PDFS) vs. Ultratech (UTEK) Critical Survey

PDF Solutions (NASDAQ: PDFS) and Ultratech (NASDAQ:UTEK) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Analyst Ratings

This is a breakdown of current ratings and price targets for PDF Solutions and Ultratech, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PDF Solutions 0 1 1 0 2.50
Ultratech 0 2 0 0 2.00

PDF Solutions presently has a consensus target price of $20.00, indicating a potential upside of 56.37%. Ultratech has a consensus target price of $29.00, indicating a potential downside of 4.07%. Given PDF Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe PDF Solutions is more favorable than Ultratech.

Volatility & Risk

PDF Solutions has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Ultratech has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Earnings and Valuation

This table compares PDF Solutions and Ultratech’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PDF Solutions $107.46 million 3.80 $9.10 million $0.14 91.36
Ultratech N/A N/A N/A $0.57 53.04

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

Profitability

This table compares PDF Solutions and Ultratech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PDF Solutions 4.08% 2.10% 1.88%
Ultratech 5.17% 3.22% 2.83%

Insider & Institutional Ownership

85.5% of PDF Solutions shares are owned by institutional investors. Comparatively, 92.7% of Ultratech shares are owned by institutional investors. 15.0% of PDF Solutions shares are owned by company insiders. Comparatively, 5.9% of Ultratech shares are owned by company 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.

Summary

PDF Solutions beats Ultratech on 7 of the 12 factors compared between the two stocks.

About PDF Solutions

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

About Ultratech

Ultratech, Inc. (Ultratech) develops, manufactures and markets photolithography, laser thermal processing and inspection equipment. The Company operates through the manufacture and distribution of capital equipment to manufacturers of integrated circuits and nanotechnology components segment. The Company serves manufacturers of semiconductor devices, including packaging processes and various nanotechnology components such as laser diodes, high-brightness light emitting diodes (HBLEDs) and micro-electro-mechanical systems (MEMS), as well as atomic layer deposition systems (ALD) for customers located throughout the world. It has operations in North America, Europe, Singapore, Japan, Taiwan, Korea and the rest of Asia. The Company supplies step-and-repeat photolithography systems based on one-to-one (1X) imaging technology to customers located throughout North America, Europe and Asia.

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