Head to Head Review: SMART Global (NASDAQ:SGH) & Canaan (NASDAQ:CAN)

SMART Global (NASDAQ:SGHGet Rating) and Canaan (NASDAQ:CANGet Rating) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Institutional & Insider Ownership

52.6% of SMART Global shares are owned by institutional investors. Comparatively, 13.8% of Canaan shares are owned by institutional investors. 2.6% of SMART Global shares are owned by insiders. Comparatively, 0.3% of Canaan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for SMART Global and Canaan, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SMART Global 0 0 6 0 3.00
Canaan 0 0 2 0 3.00

SMART Global currently has a consensus target price of $43.00, suggesting a potential upside of 117.39%. Canaan has a consensus target price of $9.50, suggesting a potential upside of 200.63%. Given Canaan’s higher possible upside, analysts clearly believe Canaan is more favorable than SMART Global.

Volatility & Risk

SMART Global has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.95, suggesting that its share price is 295% more volatile than the S&P 500.

Profitability

This table compares SMART Global and Canaan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SMART Global 1.97% 49.59% 11.86%
Canaan 39.61% 76.66% 47.19%

Valuation and Earnings

This table compares SMART Global and Canaan’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SMART Global $1.50 billion 0.66 $21.31 million $0.64 30.67
Canaan $782.52 million 0.75 $313.89 million $2.11 1.50

Canaan has lower revenue, but higher earnings than SMART Global. Canaan is trading at a lower price-to-earnings ratio than SMART Global, indicating that it is currently the more affordable of the two stocks.

Summary

Canaan beats SMART Global on 8 of the 13 factors compared between the two stocks.

SMART Global Company Profile (Get Rating)

SMART Global Holdings, Inc. designs and manufactures specialty solutions for the computing, memory, and LED markets in the United states, Brazil, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platforms Solutions, and LED Solutions segments. The company offers dynamic random access memory modules for desktops, notebooks, servers, and smartphones; embedded and removable flash memory products; and flash component products. It also provides supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. In addition, the company offers Penguin Computing solutions to customers in financial services, energy, government, social media, and education end markets; Penguin Edge solutions to government, telecommunications, health care, smart city, network edge, and industrial applications; and hardware and software products, including solutions based on the Open Compute Project. Further, it provides servers, software, integrated turn-key clusters, enterprise-grade storage, and networking in hardware or cloud-based solutions through Penguin-On-Demand; Open Compute Tundra Extreme Scale products; turn-key storage solutions; and rackmount servers and GPU accelerated computing platforms. Additionally, the company's LED Solutions offers application-optimized LEDs for lighting, video screens, and specialty lighting applications under the CreeLED brand. It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

Canaan Company Profile (Get Rating)

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final system products by integrating IC products for bitcoin mining and related components primarily in the People's Republic of China. It is also involved in the assembly of system products; and supply chain and distribution of system products. The company has a strategic cooperation with Northern Data AG in the areas of artificial intelligence development, blockchain technology, and datacenter operations. The company was founded in 2013 and is based in Hangzhou, the People's Republic of China.

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