Xcerra Corporation (NASDAQ:XCRA) vs. ASML Holding N.V. (ASML) Critical Analysis

Xcerra Corporation (NASDAQ: XCRA) and ASML Holding N.V. (NASDAQ:ASML) 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, dividends, institutional ownership, earnings, profitability, valuation and risk.

Institutional and Insider Ownership

86.3% of Xcerra Corporation shares are owned by institutional investors. Comparatively, 16.1% of ASML Holding N.V. shares are owned by institutional investors. 2.6% of Xcerra Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Xcerra Corporation and ASML Holding N.V., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcerra Corporation 0 5 0 0 2.00
ASML Holding N.V. 0 7 10 0 2.59

Xcerra Corporation presently has a consensus target price of $10.25, indicating a potential upside of 3.85%. ASML Holding N.V. has a consensus target price of $160.67, indicating a potential downside of 1.07%. Given Xcerra Corporation’s higher probable upside, equities analysts clearly believe Xcerra Corporation is more favorable than ASML Holding N.V..

Earnings and Valuation

This table compares Xcerra Corporation and ASML Holding N.V.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcerra Corporation $390.77 million 1.37 $34.79 million $0.42 23.50
ASML Holding N.V. $9.10 billion 7.68 $3.19 billion $4.57 35.54

ASML Holding N.V. has higher revenue and earnings than Xcerra Corporation. Xcerra Corporation is trading at a lower price-to-earnings ratio than ASML Holding N.V., indicating that it is currently the more affordable of the two stocks.

Dividends

ASML Holding N.V. pays an annual dividend of $1.11 per share and has a dividend yield of 0.7%. Xcerra Corporation does not pay a dividend. ASML Holding N.V. pays out 24.3% of its earnings in the form of a dividend.

Profitability

This table compares Xcerra Corporation and ASML Holding N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcerra Corporation 5.77% 9.08% 6.71%
ASML Holding N.V. 23.69% 18.48% 10.71%

Volatility and Risk

Xcerra Corporation has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, ASML Holding N.V. has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Summary

ASML Holding N.V. beats Xcerra Corporation on 11 of the 16 factors compared between the two stocks.

About Xcerra Corporation

Xcerra Corporation is a provider of test and handling capital equipment, interface products, test fixtures and related services to the semiconductor and electronics manufacturing industries. The Company operates through six segments: Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes/Pins and Fixtures. The Semiconductor Test segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors. The PCB test segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and loaded printed circuit boards.

About ASML Holding N.V.

ASML Holding N.V. is a holding company. The Company is a manufacturer of chip-making equipment. The Company is engaged in the development, production, marketing, selling and servicing of semiconductor equipment systems, consisting of lithography systems. The Company’s products include systems, and installed base products and services. The Company’s principal operations are in the Netherlands, the United States and Asia. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for 300 millimeter processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems). The Company also offers NXE systems, which are equipped with extreme ultraviolet (EUV) light source technology. The Company offers YieldStar, a wafer metrology system.

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