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

Profitability

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

Net Margins Return on Equity Return on Assets
Cirrus Logic 16.31% 26.32% 19.76%
SemiLEDS Corporation -182.84% -59.70% -30.13%

Analyst Ratings

This is a summary of current ratings and recommmendations for Cirrus Logic and SemiLEDS Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cirrus Logic 1 3 8 0 2.58
SemiLEDS Corporation 0 0 0 0 N/A

Cirrus Logic currently has a consensus price target of $67.64, indicating a potential upside of 3.56%. Given Cirrus Logic’s higher possible upside, research analysts plainly believe Cirrus Logic is more favorable than SemiLEDS Corporation.

Volatility & Risk

Cirrus Logic has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500. Comparatively, SemiLEDS Corporation has a beta of 2.27, suggesting that its stock price is 127% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cirrus Logic and SemiLEDS Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cirrus Logic $1.54 billion 2.71 $387.16 million $3.78 17.28
SemiLEDS Corporation $8.53 million 0.88 -$4.27 million ($5.04) -0.42

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

Institutional and Insider Ownership

94.9% of Cirrus Logic shares are held by institutional investors. Comparatively, 2.7% of SemiLEDS Corporation shares are held by institutional investors. 1.9% of Cirrus Logic shares are held by insiders. Comparatively, 40.1% of SemiLEDS Corporation shares are held by 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 SemiLEDS Corporation on 10 of the 12 factors compared between the two stocks.

About Cirrus Logic

Cirrus Logic, Inc. is engaged in providing integrated circuits (ICs) for audio and voice signal processing applications. The Company develops analog and mixed-signal ICs for a range of customers. The Company offers two product lines: Portable Audio, and Non-Portable Audio and Other. The Company’s primary facility housing engineering, sales and marketing, and administration functions is located in Austin, Texas. The Company offers products through both direct and indirect sales channels across the world. The Company’s portable audio products include analog and mixed-signal components designed for mobile devices including smartphones, tablets, digital headsets, wearables, smart accessories and portable media players. Its non-portable audio and other products include analog and mixed-signal components targeting the consumer market, including smart home applications, and the automotive, energy and industrial markets.

About SemiLEDS Corporation

SemiLEDs Corporation develops, manufactures and sells light emitting diode (LED) chips and LED components. The Company’s products are used primarily for general lighting applications, including street lights and commercial, industrial and residential lighting. Its LED chips may also be used in specialty industrial applications, such as ultraviolet (UV), curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, architectural lighting and entertainment lighting. The Company produces a range of blue, white, green and UV LED chips, including its Enhanced Vertical (EV) LED product series, ranging from chip sizes of approximately 380 microns (um) by 380um to 1,520um by 1,520um. It designs, assembles and sells lighting fixtures and systems for general lighting applications, including commercial, residential and industrial lighting. Its lighting products consist primarily of LED luminaries and LED retrofits.

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