GCT Semiconductor (NYSE:GCTS) and Taiwan Semiconductor Manufacturing (NYSE:TSM) Financial Review

GCT Semiconductor (NYSE:GCTS) and Taiwan Semiconductor Manufacturing (NYSE:TSM) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for GCT Semiconductor and Taiwan Semiconductor Manufacturing, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	0	0	1	0	3.00
Taiwan Semiconductor Manufacturing	0	1	5	0	2.83

GCT Semiconductor presently has a consensus price target of $5.00, suggesting a potential upside of 306.50%. Taiwan Semiconductor Manufacturing has a consensus price target of $217.00, suggesting a potential upside of 4.79%. Given GCT Semiconductor’s stronger consensus rating and higher probable upside, equities analysts clearly believe GCT Semiconductor is more favorable than Taiwan Semiconductor Manufacturing.

Valuation and Earnings

This table compares GCT Semiconductor and Taiwan Semiconductor Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	$6.36 million	9.38	-$2.00 million	($0.44)	-2.80
Taiwan Semiconductor Manufacturing	$3,140.92 billion	0.34	$36.49 billion	$7.78	26.62

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

Institutional and Insider Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. Comparatively, 16.5% of Taiwan Semiconductor Manufacturing shares are owned by institutional investors. 0.2% of GCT Semiconductor shares are owned by company insiders. Comparatively, 1.1% of Taiwan Semiconductor Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares GCT Semiconductor and Taiwan Semiconductor Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	N/A	N/A	-27.81%
Taiwan Semiconductor Manufacturing	40.51%	30.47%	19.55%

Risk and Volatility

GCT Semiconductor has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Taiwan Semiconductor Manufacturing has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Summary

Taiwan Semiconductor Manufacturing beats GCT Semiconductor on 10 of the 14 factors compared between the two stocks.

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.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.