Contrasting MACOM Technology Solutions (NASDAQ:MTSI) & Arteris (NASDAQ:AIP)

Arteris (NASDAQ:AIP) and MACOM Technology Solutions (NASDAQ:MTSI) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Volatility & Risk

Arteris has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, MACOM Technology Solutions has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Arteris and MACOM Technology Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arteris	0	1	3	0	2.75
MACOM Technology Solutions	0	2	9	1	2.92

Arteris presently has a consensus price target of $12.75, suggesting a potential upside of 86.95%. MACOM Technology Solutions has a consensus price target of $128.64, suggesting a potential upside of 13.12%. Given Arteris’ higher probable upside, analysts clearly believe Arteris is more favorable than MACOM Technology Solutions.

Earnings and Valuation

This table compares Arteris and MACOM Technology Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arteris	$57.72 million	4.90	-$33.64 million	($0.87)	-7.84
MACOM Technology Solutions	$790.55 million	10.69	$76.86 million	($1.44)	-78.97

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

Profitability

This table compares Arteris and MACOM Technology Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arteris	-58.27%	-828.71%	-32.69%
MACOM Technology Solutions	-13.05%	12.42%	7.84%

Insider and Institutional Ownership

64.4% of Arteris shares are owned by institutional investors. Comparatively, 76.1% of MACOM Technology Solutions shares are owned by institutional investors. 33.7% of Arteris shares are owned by insiders. Comparatively, 16.3% of MACOM Technology Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

MACOM Technology Solutions beats Arteris on 11 of the 15 factors compared between the two stocks.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.

About MACOM Technology Solutions

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications across the radio frequency (RF), microwave, millimeter wave, and lightwave spectrum in the United States, China, Australia, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand, and internationally. The company offers a portfolio of standard and custom devices, including integrated circuits, multi-chip modules, diodes, amplifiers, switches and switch limiters, passive and active components, and subsystems. Its semiconductor products are electronic components that are incorporated in electronic systems, such as wireless base stations, high-capacity optical networks, radar, and medical systems and test and measurement applications. The company serves various markets comprising telecommunication that includes carrier infrastructure, which comprise long-haul/metro, 5G, and fiber-to-the-X/passive optical network; industrial and defense, including military and commercial radar, RF jammers, electronic countermeasures, and communication data links, as well as multi-market applications, such as industrial, medical, test and measurement, and scientific applications; and data centers. It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors. The company was founded in 1950 and is headquartered in Lowell, Massachusetts.