Flextronics International (FLEX) versus InvenSense (INVN) Critical Survey

Flextronics International (NASDAQ: FLEX) and InvenSense (NYSE:INVN) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Flextronics International and InvenSense, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flextronics International 0 2 7 0 2.78
InvenSense 0 4 2 0 2.33

Flextronics International presently has a consensus target price of $18.19, suggesting a potential upside of 1.10%. InvenSense has a consensus target price of $11.33, suggesting a potential downside of 12.75%. Given Flextronics International’s stronger consensus rating and higher probable upside, research analysts clearly believe Flextronics International is more favorable than InvenSense.

Risk and Volatility

Flextronics International has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, InvenSense has a beta of 2.58, meaning that its share price is 158% more volatile than the S&P 500.

Insider and Institutional Ownership

94.6% of Flextronics International shares are owned by institutional investors. Comparatively, 46.5% of InvenSense shares are owned by institutional investors. 0.8% of Flextronics International shares are owned by insiders. Comparatively, 14.2% of InvenSense shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Flextronics International and InvenSense’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Flextronics International $23.99 billion 0.40 $1.22 billion $1.01 17.81
InvenSense N/A N/A N/A ($0.58) -22.40

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

Profitability

This table compares Flextronics International and InvenSense’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flextronics International 2.25% 23.05% 4.88%
InvenSense -20.65% -18.29% -11.24%

Summary

Flextronics International beats InvenSense on 9 of the 11 factors compared between the two stocks.

About Flextronics International

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.

About InvenSense

InvenSense, Inc. (InvenSense) is engaged in designing, developing, marketing and selling of sensor system-on-chip (SoC), including accelerometers, gyroscopes and microphones for the mobile, wearable, smart home, gaming, industrial and automotive market segments. The Company delivers solutions based on its motion and sound technology; focused on solutions, such as smartphones, tablets, wearables, console and portable video gaming devices, digital television and set-top box remote controls, fitness accessories, sports equipment, digital still cameras, automobiles, ultra-books, laptops, hearing aids, stabilization systems, tools, navigation devices, remote controlled toys and other household consumer and industrial devices. Its motion solutions detect and track an object’s motion in three-dimensional space.

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