Contrasting GCT Semiconductor (NYSE:GCTS) & Valens Semiconductor (NYSE:VLN)

Valens Semiconductor (NYSE:VLN) and GCT Semiconductor (NYSE:GCTS) are both small-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Valens Semiconductor and GCT Semiconductor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	1	0	1	0	2.00
GCT Semiconductor	2	0	2	0	2.00

Valens Semiconductor currently has a consensus price target of $3.00, suggesting a potential upside of 100.80%. GCT Semiconductor has a consensus price target of $3.50, suggesting a potential upside of 172.37%. Given GCT Semiconductor’s higher probable upside, analysts clearly believe GCT Semiconductor is more favorable than Valens Semiconductor.

Profitability

This table compares Valens Semiconductor and GCT Semiconductor’s 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%
GCT Semiconductor	-1,010.20%	N/A	-198.45%

Risk and Volatility

Valens Semiconductor has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Valuation and Earnings

This table compares Valens Semiconductor and GCT Semiconductor”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	2.64	-$36.58 million	($0.29)	-5.15
GCT Semiconductor	$9.13 million	8.04	-$12.38 million	($0.77)	-1.67

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

Institutional & Insider Ownership

33.9% of Valens Semiconductor shares are held by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are held by institutional investors. 58.9% of Valens Semiconductor shares are held by company insiders. Comparatively, 5.4% of GCT Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

GCT Semiconductor beats Valens Semiconductor on 7 of the 13 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 GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.