Head-To-Head Review: Soitec (OTCMKTS:SLOIY) versus Transphorm (OTCMKTS:TGAN)

Soitec (OTCMKTS:SLOIY) and Transphorm (OTCMKTS:TGAN) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Insider and Institutional Ownership

62.0% of Transphorm shares are owned by institutional investors. 2.9% of Transphorm shares are owned 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.

Profitability

This table compares Soitec and Transphorm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Soitec	N/A	N/A	N/A
Transphorm	-189.65%	-114.30%	-65.96%

Valuation and Earnings

This table compares Soitec and Transphorm’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Soitec	N/A	N/A	N/A	($1.64)	-47.41
Transphorm	$17.24 million	8.46	-$30.60 million	($0.65)	-3.62

Soitec has higher earnings, but lower revenue than Transphorm. Soitec is trading at a lower price-to-earnings ratio than Transphorm, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Soitec and Transphorm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Soitec	1	1	8	0	2.70
Transphorm	0	1	1	0	2.50

Transphorm has a consensus target price of $5.75, indicating a potential upside of 144.16%. Given Transphorm’s higher possible upside, analysts plainly believe Transphorm is more favorable than Soitec.

Summary

Transphorm beats Soitec on 6 of the 11 factors compared between the two stocks.

About Soitec

Soitec S.A. designs and manufactures semiconductor materials worldwide. Its products are used to manufacture chips that are used in smart phones, tablets, computers, IT servers, and data centers, as well as electronic components in cars, connected devices, and industrial and medical equipment. It offers Fully Depleted Silicon-On-Insulator (FD-SOI) for automotive radar and processors, and PD-SOI and FinFET-SOI products for high-performance computing markets. The company also offers RF-SOI substrates for front-end module devices, as well as 4G LTE and 5G smartphones. In addition, it offers power-SOI; Smart photonics-SOI; Smart Imager-SOI; Auto Smartsic; Connect RF-GaN; and Gallium Nitride (GAN) Epitaxial wafers for energy efficient power management system. Soitec S.A. was incorporated in 1992 and is headquartered in Bernin, France.

About Transphorm

Transphorm, Inc., a semiconductor company, develops, manufactures, and sells gallium nitride (GaN) semiconductor components for high voltage power conversion applications in Mainland China, Hong Kong, Taiwan, the United States, Japan, South Korea, India, and Europe. The company's products include GaN field effect transistors in various packages. Its GaN devices allows customers to design power systems creating functional value in various end products, including smartphone power adapters/fast-chargers, power supplies for datacenter servers/communication, industrial power converters, chargers/converters/inverters for electric vehicles, and other applications. The company offers its products through regional distributors and sales representatives. Transphorm, Inc. was founded in 2007 and is headquartered in Goleta, California.