Dropbox (NASDAQ:DBX) & Arteris (NASDAQ:AIP) Financial Review

Arteris (NASDAQ:AIP) and Dropbox (NASDAQ:DBX) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Institutional and Insider Ownership

64.4% of Arteris shares are held by institutional investors. Comparatively, 94.8% of Dropbox shares are held by institutional investors. 23.3% of Arteris shares are held by insiders. Comparatively, 35.5% of Dropbox shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Arteris has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, Dropbox has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Valuation and Earnings

This table compares Arteris and Dropbox”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arteris	$84.61 million	11.76	-$34.75 million	($0.87)	-23.26
Dropbox	$2.52 billion	3.41	$508.40 million	$1.80	21.19

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

Profitability

This table compares Arteris and Dropbox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arteris	-46.70%	-295.96%	-22.26%
Dropbox	17.49%	-24.26%	15.88%

Analyst Recommendations

This is a summary of recent ratings and price targets for Arteris and Dropbox, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arteris	1	0	5	0	2.67
Dropbox	3	4	1	0	1.75

Arteris presently has a consensus price target of $41.00, suggesting a potential upside of 102.57%. Dropbox has a consensus price target of $30.75, suggesting a potential downside of 19.37%. Given Arteris’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Arteris is more favorable than Dropbox.

Summary

Dropbox beats Arteris on 9 of the 14 factors compared between the two stocks.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.

About Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.