Cree (NASDAQ: CREE) and MACOM Technology Solutions (NASDAQ:MTSI) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
Risk & Volatility
Cree has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, MACOM Technology Solutions has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.
This table compares Cree and MACOM Technology Solutions’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MACOM Technology Solutions||-28.19%||10.35%||5.05%|
This is a summary of current recommendations for Cree and MACOM Technology Solutions, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MACOM Technology Solutions||1||5||5||0||2.36|
Cree presently has a consensus price target of $33.71, indicating a potential downside of 16.35%. MACOM Technology Solutions has a consensus price target of $35.00, indicating a potential upside of 105.40%. Given MACOM Technology Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe MACOM Technology Solutions is more favorable than Cree.
Insider and Institutional Ownership
98.9% of Cree shares are held by institutional investors. Comparatively, 90.4% of MACOM Technology Solutions shares are held by institutional investors. 1.1% of Cree shares are held by insiders. Comparatively, 32.2% of MACOM Technology Solutions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Cree and MACOM Technology Solutions’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cree||$1.47 billion||2.73||-$98.11 million||$0.19||212.11|
|MACOM Technology Solutions||$698.77 million||1.57||-$169.49 million||$1.88||9.06|
Cree has higher revenue and earnings than MACOM Technology Solutions. MACOM Technology Solutions is trading at a lower price-to-earnings ratio than Cree, indicating that it is currently the more affordable of the two stocks.
MACOM Technology Solutions beats Cree on 8 of the 14 factors compared between the two stocks.
Cree, Inc. provides lighting-class light emitting diode (LED), lighting, and semiconductor products for power and radio-frequency (RF) applications in the United States, China, Europe, South Korea, Japan, Malaysia, Taiwan, and internationally. Its Lighting Products segment offers LED lighting systems and bulbs for use in settings, such as office and retail space, restaurants and hospitality, schools and universities, manufacturing, healthcare, airports, municipal, residential, street lighting and parking structures, and other applications. This segment sells its products to distributors, retailers, and customers. The company's LED Products segment provides blue and green LED chip products for use in various applications, including video screens, gaming displays, function indicator lights and automotive backlights, headlamps, and directional indicators. It also offers XLamp LED components and LED modules for lighting applications; and surface mount and through-hole packaged LED products for video, signage, general illumination, transportation, gaming, and specialty lighting applications. Its Wolfspeed segment provides silicon carbide (SiC) materials for RF, power switching, gemstones, and other applications. This segment also offers SiC-based power products consisting of SiC Schottky diodes, metal se oxide miconductor field-effect transistors, power modules, and gate driver boards for use in power supplies used in computer servers, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, this segment provides gallium nitride (GaN) die, high electron mobility transistors (HEMTs) and monolithic microwave integrated circuits (MMICs) for military, telecom, and other commercial applications; and custom die manufacturing services for GaN HEMTs and MMICs. Cree, Inc. was founded in 1987 and is headquartered in Durham, North Carolina.
About MACOM Technology Solutions
MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog radio frequency (RF), microwave, millimeterwave, and photonic semiconductor solutions in the United States, the Asia Pacific, and internationally. The company offers a portfolio of standard and custom devices, which include integrated circuits, multi-chip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components, and complete subsystems for more than 60 product lines. Its semiconductor products are electronic components that are incorporated in electronic systems, such as point-to-point wireless backhaul radios, high density networks, active antenna arrays, radars, magnetic resonance imaging systems, and unmanned aerial vehicles. The company serves various markets, such as networks, which includes carrier and enterprise infrastructure, wired broadband and cellular backhaul, cellular infrastructure, photonic solutions, and fiber optic applications; aerospace and defense comprising military and commercial radar, RF jammers, electronic countermeasures, and communication data links; and multi-market that consist of industrial, medical, test and measurement, and scientific applications. It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors, as well as an e-commerce channel. MACOM Technology Solutions Holdings, Inc. was incorporated in 2009 and is headquartered in Lowell, Massachusetts.
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