Head to Head Contrast: Rohm (OTCMKTS:ROHCY) and AXT (NASDAQ:AXTI)

AXT (NASDAQ:AXTI) and Rohm (OTCMKTS:ROHCY) are both mid-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Volatility & Risk

AXT has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, Rohm has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares AXT and Rohm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AXT	-24.07%	-9.50%	-5.95%
Rohm	-7.27%	-1.07%	-0.67%

Institutional & Insider Ownership

49.5% of AXT shares are owned by institutional investors. 8.8% of AXT shares are owned 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.

Valuation & Earnings

This table compares AXT and Rohm”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AXT	$88.33 million	33.25	-$21.26 million	($0.48)	-110.08
Rohm	$2.95 billion	2.86	-$330.42 million	($0.63)	-34.62

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for AXT and Rohm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AXT	1	2	2	0	2.20
Rohm	0	0	0	0	0.00

AXT presently has a consensus target price of $22.80, indicating a potential downside of 56.85%. Given AXT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe AXT is more favorable than Rohm.

Summary

AXT beats Rohm on 9 of the 14 factors compared between the two stocks.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.

About Rohm

ROHM Co., Ltd. manufactures and sells electronic components worldwide. The company operates through three segments: LSI, Semiconductor Devices, and Modules. It provides ICs comprising memory, amplifiers and linear, power management, motor/actuator drivers, resistors, clocks and timers, switches and multiplexers, logic, data converters, sensors and MEMS, display drivers, interfaces, wireless LSIs, audio and video products, speech synthesis LSI, and microcontrollers. The company also offers discrete semiconductor products, such as MOSFETs, bipolar transistors, and diodes; power devices, including power transistors and diodes, SiC power devices, IGBT, and IPM; modules, including optical modules, wireless communication modules, wireless charger modules, and print heads; and opto devices comprising LEDs, LED displays, laser diodes, and optical sensors, as well as foundry services, including thin-film piezoelectric MEMS, wafers, and WL-CSP. Its products are used in industry, automotive, consumer electronics, and telecommunications applications. The company was incorporated in 1940 and is headquartered in Kyoto, Japan.