GlobalFoundries (NASDAQ:GFS – Get Free Report) and Ambarella (NASDAQ:AMBA – Get Free Report) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.
Volatility and Risk
GlobalFoundries has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Ambarella has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.
Valuation and Earnings
This table compares GlobalFoundries and Ambarella”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GlobalFoundries | $6.75 billion | 3.00 | -$265.00 million | ($0.09) | -407.00 |
| Ambarella | $284.86 million | 10.96 | -$117.13 million | ($1.88) | -38.57 |
Ambarella has lower revenue, but higher earnings than GlobalFoundries. GlobalFoundries is trading at a lower price-to-earnings ratio than Ambarella, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares GlobalFoundries and Ambarella’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GlobalFoundries | -0.65% | 6.64% | 4.49% |
| Ambarella | -21.31% | -13.02% | -10.52% |
Analyst Recommendations
This is a summary of current ratings and target prices for GlobalFoundries and Ambarella, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GlobalFoundries | 2 | 8 | 5 | 0 | 2.20 |
| Ambarella | 1 | 4 | 7 | 2 | 2.71 |
GlobalFoundries currently has a consensus target price of $40.62, suggesting a potential upside of 10.88%. Ambarella has a consensus target price of $96.00, suggesting a potential upside of 32.38%. Given Ambarella’s stronger consensus rating and higher possible upside, analysts clearly believe Ambarella is more favorable than GlobalFoundries.
Institutional & Insider Ownership
82.1% of Ambarella shares are held by institutional investors. 5.3% of Ambarella shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Ambarella beats GlobalFoundries on 10 of the 15 factors compared between the two stocks.
About GlobalFoundries
GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.
About Ambarella
Ambarella, Inc. develops semiconductor solutions that enable high-definition (HD) and ultra HD compression, image signal processing, and artificial intelligence processing worldwide. The company's system-on-a-chip designs integrated HD video processing, image processing, artificial intelligence computer vision algorithms, audio processing, and system functions onto a single chip for delivering video and image quality, differentiated functionality, and low power consumption. Its solutions are used in automotive cameras, such as automotive video recorders, electronic mirrors, front advanced driver assistance system camera, cabin monitoring system and driver monitoring system camera, and central domain controllers for autonomous vehicle; enterprise and public class, and home security camera; and robotics and industrial application, including identification/authentication cameras, robotic products, and sensing cameras, as well as cameras for the enterprise, home, public spaces, and consumer leisure comprising wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing, and virtual reality applications. The company sells its solutions to original design manufacturers and original equipment manufacturers through its direct sales force and distributors. Ambarella, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.
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