Lam Research (NASDAQ:LRCX) and Alpha and Omega Semiconductor (NASDAQ:AOSL) Financial Contrast

Lam Research (NASDAQ:LRCX) and Alpha and Omega Semiconductor (NASDAQ:AOSL) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lam Research	30.22%	62.81%	29.48%
Alpha and Omega Semiconductor	-15.06%	-3.78%	-3.03%

Institutional and Insider Ownership

84.6% of Lam Research shares are owned by institutional investors. Comparatively, 79.0% of Alpha and Omega Semiconductor shares are owned by institutional investors. 0.3% of Lam Research shares are owned by company insiders. Comparatively, 16.7% of Alpha and Omega Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Lam Research and Alpha and Omega Semiconductor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lam Research	0	6	28	1	2.86
Alpha and Omega Semiconductor	2	2	1	0	1.80

Lam Research presently has a consensus price target of $245.35, suggesting a potential upside of 8.44%. Alpha and Omega Semiconductor has a consensus price target of $23.67, suggesting a potential upside of 12.75%. Given Alpha and Omega Semiconductor’s higher possible upside, analysts clearly believe Alpha and Omega Semiconductor is more favorable than Lam Research.

Earnings and Valuation

This table compares Lam Research and Alpha and Omega Semiconductor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lam Research	$18.44 billion	15.33	$5.36 billion	$4.88	46.36
Alpha and Omega Semiconductor	$696.16 million	0.90	-$96.98 million	($3.47)	-6.05

Lam Research has higher revenue and earnings than Alpha and Omega Semiconductor. Alpha and Omega 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.

Risk & Volatility

Lam Research has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, Alpha and Omega Semiconductor has a beta of 1.99, indicating that its stock price is 99% more volatile than the S&P 500.

Summary

Lam Research beats Alpha and Omega Semiconductor on 12 of the 15 factors compared between the two stocks.

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.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers transient voltage suppressors, analog switch, and electromagnetic interference filter for notebooks, desktop PCs, tablets, flat panel displays, TVs, smart phones, and portable electronic devices; and 650V and 1200V SiC MOSFET. Alpha and Omega Semiconductor Limited was incorporated in 2000 and is headquartered in Sunnyvale, California.