Valens Semiconductor (NYSE:VLN – Get Free Report) and AXT (NASDAQ:AXTI – Get Free Report) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
Profitability
This table compares Valens Semiconductor and AXT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Valens Semiconductor | -55.20% | -20.44% | -17.33% |
| AXT | -19.10% | -8.54% | -5.32% |
Institutional & Insider Ownership
33.9% of Valens Semiconductor shares are owned by institutional investors. Comparatively, 49.5% of AXT shares are owned by institutional investors. 58.9% of Valens Semiconductor shares are owned by company insiders. Comparatively, 8.8% of AXT shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Valens Semiconductor | 0 | 0 | 1 | 1 | 3.50 |
| AXT | 0 | 0 | 4 | 0 | 3.00 |
Valens Semiconductor currently has a consensus target price of $4.00, suggesting a potential upside of 44.40%. AXT has a consensus target price of $4.70, suggesting a potential upside of 117.69%. Given AXT’s higher possible upside, analysts plainly believe AXT is more favorable than Valens Semiconductor.
Earnings & Valuation
This table compares Valens Semiconductor and AXT”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Valens Semiconductor | $63.13 million | 4.67 | -$36.58 million | ($0.33) | -8.39 |
| AXT | $99.36 million | 0.99 | -$11.62 million | ($0.43) | -5.02 |
AXT has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than AXT, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Valens Semiconductor has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, AXT has a beta of 2.07, indicating that its share price is 107% more volatile than the S&P 500.
Summary
AXT beats Valens Semiconductor on 10 of the 15 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 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.
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