Analyzing Applied Materials (NASDAQ:AMAT) & Valens Semiconductor (NYSE:VLN)

Valens Semiconductor (NYSE:VLN) and Applied Materials (NASDAQ:AMAT) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Institutional and Insider Ownership

33.9% of Valens Semiconductor shares are held by institutional investors. Comparatively, 80.6% of Applied Materials shares are held by institutional investors. 58.9% of Valens Semiconductor shares are held by insiders. Comparatively, 0.2% of Applied Materials shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Valens Semiconductor has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, Applied Materials has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Profitability

This table compares Valens Semiconductor and Applied Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valens Semiconductor	-44.38%	-23.12%	-18.88%
Applied Materials	24.67%	39.26%	22.13%

Valuation and Earnings

This table compares Valens Semiconductor and Applied Materials”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$57.86 million	2.82	-$36.58 million	($0.29)	-5.50
Applied Materials	$28.37 billion	8.27	$7.00 billion	$8.68	34.10

Applied Materials has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than Applied Materials, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Valens Semiconductor and Applied Materials, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	1	0	1	0	2.00
Applied Materials	0	13	21	0	2.62

Valens Semiconductor presently has a consensus target price of $3.00, indicating a potential upside of 88.09%. Applied Materials has a consensus target price of $246.78, indicating a potential downside of 16.63%. Given Valens Semiconductor’s higher possible upside, research analysts clearly believe Valens Semiconductor is more favorable than Applied Materials.

Summary

Applied Materials beats Valens Semiconductor on 12 of the 14 factors compared between the two stocks.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.

About Applied Materials

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.