Financial Review: Applied Micro Circuits (AMCC) and Semtech (SMTC)

Semtech (NASDAQ: SMTC) and Applied Micro Circuits (NASDAQ:AMCC) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Valuation and Earnings

This table compares Semtech and Applied Micro Circuits’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Semtech $544.27 million 4.08 $54.66 million $0.69 48.55
Applied Micro Circuits N/A N/A N/A ($0.38) -22.24

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

Insider & Institutional Ownership

94.2% of Semtech shares are owned by institutional investors. Comparatively, 73.3% of Applied Micro Circuits shares are owned by institutional investors. 2.2% of Semtech shares are owned by insiders. Comparatively, 12.4% of Applied Micro Circuits shares are owned 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.

Profitability

This table compares Semtech and Applied Micro Circuits’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semtech 7.79% 12.13% 7.38%
Applied Micro Circuits -11.11% -16.63% -13.04%

Analyst Ratings

This is a summary of current ratings for Semtech and Applied Micro Circuits, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semtech 0 1 7 0 2.88
Applied Micro Circuits 0 0 0 0 N/A

Semtech currently has a consensus price target of $43.29, suggesting a potential upside of 29.21%. Given Semtech’s higher possible upside, equities research analysts plainly believe Semtech is more favorable than Applied Micro Circuits.

Summary

Semtech beats Applied Micro Circuits on 8 of the 9 factors compared between the two stocks.

Semtech Company Profile

Semtech Corporation is a supplier of analog and mixed-signal semiconductor products. The Company designs, develops and markets a range of products for commercial applications, which are sold into the enterprise computing, communications, consumer and industrial end-markets. Its product lines include Signal Integrity, Protection, Wireless and Sensing, and Power and High-Reliability. Applications for the industrial market include video broadcast studio equipment, automated meter reading, wireless charging, military and aerospace, medical, security systems, automotive, Internet of Things, industrial and home automation, and video security and surveillance. Enterprise computing end-markets include desktops, notebooks, servers, graphic boards, printers, datacenter related equipment and passive optical networks. Communications end-market applications include wireless base stations, carrier networks, switches and routers, cable modems, signal conditioners and wireless local area network.

Applied Micro Circuits Company Profile

Applied Micro Circuits Corporation (AMCC) provides silicon solutions for cloud infrastructure and data centers, as well as connectivity products for edge, metro and long haul communications equipment. The Company’s products serve Computing and Connectivity markets. Its Computing products include the X-Gene family of server processors, based on the ARMv8 64-bit Instruction Set Architecture (ISA), which target mainstream cloud and data center infrastructure, including hyperscale, telco, enterprise and high performance computing. It also offers embedded computing products, which include HeliX family of processors, based on the ARM 64-bit ISA and its PowerPC products, based on Power Architecture. Its embedded Computing products are deployed in various applications, including networking and telecom, enterprise storage and industrial applications. The Connectivity business includes X-Weave family of products for service providers and public cloud, private cloud and enterprise data centers.

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