Financial Comparison: Magnachip Semiconductor (NYSE:MX) vs. Lam Research (NASDAQ:LRCX)

Magnachip Semiconductor (NYSE:MX) and Lam Research (NASDAQ:LRCX) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Magnachip Semiconductor and Lam Research, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnachip Semiconductor	1	1	0	0	1.50
Lam Research	0	6	26	0	2.81

Lam Research has a consensus price target of $360.23, indicating a potential upside of 49.57%. Given Lam Research’s stronger consensus rating and higher probable upside, analysts plainly believe Lam Research is more favorable than Magnachip Semiconductor.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magnachip Semiconductor	-17.26%	-5.84%	-4.10%
Lam Research	32.34%	72.15%	36.92%

Institutional and Insider Ownership

74.3% of Magnachip Semiconductor shares are owned by institutional investors. Comparatively, 84.6% of Lam Research shares are owned by institutional investors. 10.9% of Magnachip Semiconductor shares are owned by insiders. Comparatively, 0.3% of Lam Research shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Magnachip Semiconductor has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500. Comparatively, Lam Research has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500.

Valuation & Earnings

This table compares Magnachip Semiconductor 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
Magnachip Semiconductor	$178.86 million	0.54	-$29.72 million	($0.84)	-3.02
Lam Research	$23.23 billion	12.95	$7.27 billion	$6.71	35.89

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

Summary

Lam Research beats Magnachip Semiconductor on 13 of the 14 factors compared between the two stocks.

About Magnachip Semiconductor

Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, computing, industrial, and automotive applications. It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, monitors, notebook PCs, tablet PC and TVs applied with liquid crystal display, organic light emitting diodes (OLED), and micro light emitting diode (Micro LED) panel. The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bikes, photovoltaic inverters, LED lighting, and motor drives; and OLED display driver integrated circuit products. It serves consumer, computing, communication, automotive and industrial electronics OEMs, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in the Asia Pacific, the United States, and Europe. The company sells its products through a direct sales force, as well as through a network of agents and distributors. Magnachip Semiconductor Corporation was incorporated in 2003 and is based in Cheongju-si, South Korea.

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.