Comparing Ambarella (NASDAQ:AMBA) & NeoMagic (OTCMKTS:NMGC)

Ambarella (NASDAQ:AMBA) and NeoMagic (OTCMKTS:NMGC) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Earnings & Valuation

This table compares Ambarella and NeoMagic”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambarella	$284.86 million	10.66	-$117.13 million	($1.88)	-37.52
NeoMagic	N/A	N/A	N/A	N/A	N/A

NeoMagic has lower revenue, but higher earnings than Ambarella.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ambarella and NeoMagic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambarella	1	4	7	2	2.71
NeoMagic	0	0	0	0	0.00

Ambarella currently has a consensus target price of $96.00, suggesting a potential upside of 36.09%. Given Ambarella’s stronger consensus rating and higher probable upside, research analysts clearly believe Ambarella is more favorable than NeoMagic.

Volatility & Risk

Ambarella has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500. Comparatively, NeoMagic has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500.

Profitability

This table compares Ambarella and NeoMagic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ambarella	-21.31%	-13.02%	-10.52%
NeoMagic	N/A	N/A	N/A

Insider and Institutional Ownership

82.1% of Ambarella shares are held by institutional investors. 5.3% of Ambarella shares are held by company insiders. Comparatively, 12.7% of NeoMagic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Ambarella beats NeoMagic on 7 of the 11 factors compared between the two stocks.

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.

About NeoMagic

NeoMagic Corporation designs and delivers semiconductors and software solutions for video, television, imaging, graphic, and audio devices. It offers microcontrollers; horizon digital picture frame and digital mobile TV solutions; and SOC processors, such as application processors and Neomobile TV solutions. The company, through its MercadoMagico.com division, operates an e-Commerce platform that allows user to buy and sell products from one another or buy premium electronic products. It sells its applications processors under the MiMagic brand name. The company was founded in 1993 and is based in Milpitas, California.