Comparing ARM (NASDAQ:ARM) & Cirrus Logic (NASDAQ:CRUS)

ARM (NASDAQ:ARM) and Cirrus Logic (NASDAQ:CRUS) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Valuation and Earnings

This table compares ARM and Cirrus Logic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$4.01 billion	39.23	$792.00 million	$0.75	198.36
Cirrus Logic	$1.90 billion	4.00	$331.51 million	$7.59	19.60

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

Volatility & Risk

ARM has a beta of 3.33, indicating that its share price is 233% more volatile than the S&P 500. Comparatively, Cirrus Logic has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares ARM and Cirrus Logic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	17.15%	14.01%	10.65%
Cirrus Logic	20.47%	20.41%	17.22%

Analyst Ratings

This is a breakdown of current recommendations and price targets for ARM and Cirrus Logic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	6	19	0	2.69
Cirrus Logic	0	3	4	1	2.75

ARM currently has a consensus target price of $171.50, indicating a potential upside of 15.28%. Cirrus Logic has a consensus target price of $150.43, indicating a potential upside of 1.11%. Given ARM’s higher possible upside, research analysts plainly believe ARM is more favorable than Cirrus Logic.

Institutional and Insider Ownership

7.5% of ARM shares are held by institutional investors. Comparatively, 88.0% of Cirrus Logic shares are held by institutional investors. 1.2% of Cirrus Logic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Cirrus Logic beats ARM on 8 of the 15 factors compared between the two stocks.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.

About Cirrus Logic

Cirrus Logic, Inc., a fabless semiconductor company, develops low-power high-precision mixed-signal processing solutions in China, the United States, and internationally. The company offers audio products, including amplifiers; codecs components that integrate analog-to-digital converters (ADCs) and digital-to-analog converters (DACs) into a single integrated circuit (IC); smart codecs, a codec with integrated digital signal processing; standalone digital signal processors; and SoundClear technology, which consists of a portfolio of tools, software, and algorithms that helps to enhance user experience with features, such as louder, high-fidelity sound, audio playback, voice capture, and hearing augmentation for use in smartphones, tablets, laptops, AR/VR headsets, home theater systems, automotive entertainment systems, and professional audio systems. It also provides high-performance mixed-signal products comprising camera controllers, haptic and sensing solutions, and battery and power ICs for use in smartphones, as well as legacy industrial and energy applications, such as digital utility meters, power supplies, energy control, energy measurement, and energy exploration. The company markets and sells its products through direct sales force, external sales representatives, and distributors. Cirrus Logic, Inc. was incorporated in 1984 and is headquartered in Austin, Texas.