Silicon Motion Technology (NASDAQ:SIMO – Get Free Report) and SolarEdge Technologies (NASDAQ:SEDG – Get Free Report) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Insider & Institutional Ownership
78.0% of Silicon Motion Technology shares are owned by institutional investors. Comparatively, 95.1% of SolarEdge Technologies shares are owned by institutional investors. 5.3% of Silicon Motion Technology shares are owned by insiders. Comparatively, 1.2% of SolarEdge Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Silicon Motion Technology and SolarEdge Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Silicon Motion Technology | 8.27% | 7.01% | 5.49% |
| SolarEdge Technologies | 1.15% | 5.00% | 2.65% |
Risk & Volatility
Analyst Recommendations
This is a summary of recent ratings for Silicon Motion Technology and SolarEdge Technologies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicon Motion Technology | 0 | 0 | 7 | 0 | 3.00 |
| SolarEdge Technologies | 3 | 21 | 6 | 0 | 2.10 |
Silicon Motion Technology presently has a consensus target price of $87.57, suggesting a potential upside of 17.97%. SolarEdge Technologies has a consensus target price of $98.81, suggesting a potential upside of 65.40%. Given SolarEdge Technologies’ higher possible upside, analysts clearly believe SolarEdge Technologies is more favorable than Silicon Motion Technology.
Earnings & Valuation
This table compares Silicon Motion Technology and SolarEdge Technologies’ gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Silicon Motion Technology | $639.14 million | 3.84 | $52.87 million | $1.58 | 46.98 |
| SolarEdge Technologies | $2.98 billion | 1.15 | $34.33 million | $0.45 | 132.76 |
Silicon Motion Technology has higher earnings, but lower revenue than SolarEdge Technologies. Silicon Motion Technology is trading at a lower price-to-earnings ratio than SolarEdge Technologies, indicating that it is currently the more affordable of the two stocks.
Summary
Silicon Motion Technology beats SolarEdge Technologies on 9 of the 14 factors compared between the two stocks.
About Silicon Motion Technology
Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.
About SolarEdge Technologies
SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. It operates in two segments, Solar and Energy Storage. The Solar segment offers power optimizers, inverters, batteries, storage solutions, electric vehicle chargers, smart tracking solutions, and smart energy management software products; Monitoring platform, a cloud-based monitoring platform, which collects power, voltage, current, and system data sent from inverters and power optimizers; and MySolarEdge app, that enables system owners to track their real-time system production and household energy consumption. This segment also provides Designer platform, an web-based tool that helps solar professionals to plan, build, and validate residential and commercial systems; Mapper application for registering the physical layout of new PV sites installed with DC optimized inverter systems; SetApp application that activates and configurate inverters; and grid services. The Energy Storage segment provides lithium-ion cells and containerized battery systems (BESS) solutions for commercial, industrial, and utility markets; modules and racks; purpose-built components and solutions, and hardware and software tools; and pre and post sales engineering support for designing, building, and managing battery and system solutions. The company offers e-mobility products, automated machines, and UPS products; and pre-sales support, ongoing trainings, and technical support and after installation services. It sells its products through solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was incorporated in 2006 and is headquartered in Herzliya, Israel.
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