Ceva (NASDAQ:CEVA) versus Allegro MicroSystems (NASDAQ:ALGM) Critical Survey

Ceva (NASDAQ:CEVA) and Allegro MicroSystems (NASDAQ:ALGM) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Volatility and Risk

Ceva has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Allegro MicroSystems has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Insider & Institutional Ownership

85.4% of Ceva shares are owned by institutional investors. Comparatively, 56.5% of Allegro MicroSystems shares are owned by institutional investors. 2.4% of Ceva shares are owned by company insiders. Comparatively, 0.4% of Allegro MicroSystems shares are owned by company 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 Ceva and Allegro MicroSystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ceva	-9.48%	-3.04%	-2.64%
Allegro MicroSystems	-9.00%	2.09%	1.36%

Analyst Recommendations

This is a summary of recent ratings and price targets for Ceva and Allegro MicroSystems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ceva	1	0	5	0	2.67
Allegro MicroSystems	1	2	8	0	2.64

Ceva presently has a consensus price target of $35.60, suggesting a potential upside of 27.05%. Allegro MicroSystems has a consensus price target of $36.78, suggesting a potential upside of 29.87%. Given Allegro MicroSystems’ higher probable upside, analysts plainly believe Allegro MicroSystems is more favorable than Ceva.

Valuation & Earnings

This table compares Ceva and Allegro MicroSystems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ceva	$106.94 million	6.26	-$8.79 million	($0.42)	-66.71
Allegro MicroSystems	$725.01 million	7.23	-$73.01 million	($0.37)	-76.54

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

Summary

Allegro MicroSystems beats Ceva on 9 of the 14 factors compared between the two stocks.

About Ceva

CEVA, Inc. provides silicon and software IP solutions to semiconductor and original equipment manufacturer (OEM) companies worldwide. Its 5G mobile and infrastructure products include Ceva-XC vector digital signal processors (DSPs) for 5G handsets, 5G RAN, and general-purpose baseband processing; PentaG-RAN, an open ran platform for base station and radio; and PentaG2 – 5G NR modem platform for UE, as well as for non-handset 5G vertical markets, such as fixed wireless access, industry 4.0, robotics, and AR/VR devices. The company’s wireless IoT products comprise RivieraWaves’ Bluetooth 5dual mode and low energy platforms, RivieraWaves’ Wi-Fi platforms, ultra-wide band platforms, and Cellular IoT and RedCap platforms, as well as sense and inference processors and platforms consist of NeuPro-M neural processing unit (NPU) family; SensPro2 sensor hub AI platforms addressing imaging, vision, powertrain, and applications, including DSP processors, AI accelerators, and a software portfolio; and Ceva-BX1 and Ceva-BX2 audio AI DSPs. Its sensing and audio software comprise RealSpace spatial audio software package; WhisPro speech recognition; ClearVox, a voice front-end software package for voice-enabled devices; and CDNN, a neural network graph compiler that enables AI developers to automatically compile, optimize, and run pre-trained networks onto embedded devices. The company’s application software IP are licensed primarily to OEMs who embed it in their system on chip designs. It delivers AI DSPs and NPUs in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools, which facilitate system design, debug, and software development. The company licenses its technology through a direct sales force. CEVA, Inc. was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003. The company was incorporated in 1999 and is headquartered in Rockville, Maryland.

About Allegro MicroSystems

Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.