Financial Analysis: Ambarella (AMBA) & Sunedison Semiconductor (SEMI)

Ambarella (NASDAQ: AMBA) and Sunedison Semiconductor (NASDAQ:SEMI) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

63.0% of Ambarella shares are held by institutional investors. Comparatively, 63.0% of Sunedison Semiconductor shares are held by institutional investors. 5.8% of Ambarella shares are held by company insiders. Comparatively, 1.9% of Sunedison Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ambarella and Sunedison Semiconductor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambarella 11.51% 7.87% 6.94%
Sunedison Semiconductor -13.19% -24.50% -10.80%

Valuation and Earnings

This table compares Ambarella and Sunedison Semiconductor’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ambarella $310.30 million 5.09 $57.81 million $1.04 45.56
Sunedison Semiconductor N/A N/A N/A ($5.29) N/A

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

Analyst Ratings

This is a summary of recent ratings and target prices for Ambarella and Sunedison Semiconductor, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambarella 0 5 7 0 2.58
Sunedison Semiconductor 0 0 0 0 N/A

Ambarella currently has a consensus price target of $60.00, indicating a potential upside of 26.64%.

Summary

Ambarella beats Sunedison Semiconductor on 8 of the 9 factors compared between the two stocks.

Ambarella Company Profile

Ambarella, Inc. offers semiconductor processing solutions for video that enable high-definition (HD), video capture, sharing and display. The Company operates through the development and sale of low-power, high-definition video products segment. Its system-on-a-chip designs incorporate HD video processing, image processing, audio processing and system functions onto a single chip. In the camera market, its platform enables the creation of video content in wearable cameras, automotive aftermarket cameras, professional and consumer Internet Protocol (IP), security cameras, telepresence cameras and unmanned aerial vehicles. In the infrastructure market, its solutions manage IP video traffic, broadcast encoding and transcoding, and IP video delivery applications. AmbaClear is its image signal processing architecture. AmbaCast is its HD video processing architecture. It offers the MotorVu 3D 360 degrees Surround View reference design for automotive original equipment manufacturer market.

Sunedison Semiconductor Company Profile

SunEdison Semiconductor Limited is engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors.

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