Comparing Lam Research (NASDAQ:LRCX) and Nova (NASDAQ:NVMI)

Nova (NASDAQ:NVMI) and Lam Research (NASDAQ:LRCX) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Institutional and Insider Ownership

83.0% of Nova shares are owned by institutional investors. Comparatively, 84.6% of Lam Research shares are owned by institutional investors. 1.0% of Nova shares are owned by insiders. Comparatively, 0.3% of Lam Research shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Nova and Lam Research”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nova	$672.40 million	16.57	$183.76 million	$7.65	49.54
Lam Research	$18.44 billion	13.84	$5.36 billion	$4.54	44.75

Lam Research has higher revenue and earnings than Nova. Lam Research is trading at a lower price-to-earnings ratio than Nova, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nova and Lam Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nova	28.73%	24.09%	15.03%
Lam Research	29.66%	60.60%	28.00%

Risk and Volatility

Nova has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Nova and Lam Research, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nova	0	3	6	0	2.67
Lam Research	0	10	26	0	2.72

Nova presently has a consensus price target of $322.86, suggesting a potential downside of 14.81%. Lam Research has a consensus price target of $161.21, suggesting a potential downside of 20.66%. Given Nova’s higher possible upside, analysts plainly believe Nova is more favorable than Lam Research.

Summary

Lam Research beats Nova on 8 of the 14 factors compared between the two stocks.

About Nova

Nova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.

About Lam Research

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.