Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) and SmartKem (NASDAQ:SMTK – Get Free Report) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.
Profitability
This table compares Allegro MicroSystems and SmartKem’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allegro MicroSystems | 1.50% | 8.30% | 5.65% |
| SmartKem | -3,997.69% | -520.47% | -168.25% |
Risk and Volatility
Allegro MicroSystems has a beta of 1.99, indicating that its stock price is 99% more volatile than the S&P 500. Comparatively, SmartKem has a beta of 3.71, indicating that its stock price is 271% more volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allegro MicroSystems | $890.10 million | 7.45 | -$14.90 million | $0.06 | 592.83 |
| SmartKem | $700,000.00 | 0.94 | -$10.51 million | ($107.00) | -0.01 |
SmartKem has lower revenue, but higher earnings than Allegro MicroSystems. SmartKem is trading at a lower price-to-earnings ratio than Allegro MicroSystems, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent recommendations for Allegro MicroSystems and SmartKem, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allegro MicroSystems | 0 | 2 | 10 | 1 | 2.92 |
| SmartKem | 1 | 0 | 0 | 0 | 1.00 |
Allegro MicroSystems presently has a consensus price target of $53.17, indicating a potential upside of 49.47%. Given Allegro MicroSystems’ stronger consensus rating and higher probable upside, equities analysts clearly believe Allegro MicroSystems is more favorable than SmartKem.
Institutional & Insider Ownership
56.5% of Allegro MicroSystems shares are owned by institutional investors. 0.5% of Allegro MicroSystems shares are owned by insiders. Comparatively, 3.5% of SmartKem 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
Allegro MicroSystems beats SmartKem on 12 of the 15 factors compared between the two stocks.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
About SmartKem
SmartKem, Inc. develops electronics transistors using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including next generation MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.
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