Contrasting Sigma Designs (SIGM) & Inphi (IPHI)

Sigma Designs (NASDAQ: SIGM) and Inphi (NYSE:IPHI) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

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This is a summary of recent ratings for Sigma Designs and Inphi, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sigma Designs 0 4 1 0 2.20
Inphi 2 3 8 1 2.57

Sigma Designs currently has a consensus target price of $7.53, suggesting a potential upside of 21.37%. Inphi has a consensus target price of $39.93, suggesting a potential upside of 29.55%. Given Inphi’s stronger consensus rating and higher possible upside, analysts plainly believe Inphi is more favorable than Sigma Designs.

Insider and Institutional Ownership

64.8% of Sigma Designs shares are owned by institutional investors. 4.5% of Sigma Designs shares are owned by company insiders. Comparatively, 3.6% of Inphi shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sigma Designs and Inphi’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sigma Designs $220.54 million 1.11 -$18.31 million N/A N/A
Inphi $348.20 million 3.82 -$74.90 million $0.58 53.14

Sigma Designs has higher earnings, but lower revenue than Inphi.

Profitability

This table compares Sigma Designs and Inphi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sigma Designs -35.55% -30.17% -20.72%
Inphi -21.51% 5.39% 2.43%

Risk and Volatility

Sigma Designs has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Inphi has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Summary

Inphi beats Sigma Designs on 10 of the 13 factors compared between the two stocks.

Sigma Designs Company Profile

Sigma Designs, Inc. provides integrated system-on-chip (SoC) solutions and intelligent platforms for use in various home entertainment and home control appliances. The company's media processor product line includes a range of platforms that are based on integrated chips, embedded software, and hardware reference designs. Its media connectivity product line comprises wired home networking controller chipsets that provide connectivity solutions between various home entertainment products and incoming video streams. The company's Internet of Things (IoT) devices consist of wireless Z-Wave chipsets, modules, and cellular-based mobile IoT tracking tags and modems that enable home security, and environmental and energy control and monitoring in new and existing homes. It also offers legacy products; and software development kits and engineering support services for hardware and software. The company markets and sells its products through direct sales force, manufacturer representatives, distributors, and resellers to end-product manufacturers, original equipment manufacturers, and original design manufacturers in Asia, North America, Europe, and internationally. The company was founded in 1982 and is headquartered in Fremont, California.

Inphi Company Profile

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. The company's analog and mixed signal semiconductor solutions offers high signal integrity at data speeds while reducing system power consumption. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications and datacenter infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement systems, and military systems. The company also provides 25G to 600G high-speed analog semiconductor solutions for the communications market. Its products perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming signals at speeds up to 400 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was incorporated in 2000 and is headquartered in Santa Clara, California.

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