Financial Contrast: Tower Semiconductor (NASDAQ:TSEM) vs. Canaan (NASDAQ:CAN)

Tower Semiconductor (NASDAQ:TSEMGet Rating) and Canaan (NASDAQ:CANGet Rating) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Insider & Institutional Ownership

16.7% of Canaan shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by insiders. Comparatively, 0.3% of Canaan shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Tower Semiconductor and Canaan, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tower Semiconductor 0 3 0 0 2.00
Canaan 0 0 3 0 3.00

Tower Semiconductor presently has a consensus target price of $45.50, indicating a potential upside of 4.60%. Canaan has a consensus target price of $7.67, indicating a potential upside of 186.07%. Given Canaan’s stronger consensus rating and higher possible upside, analysts clearly believe Canaan is more favorable than Tower Semiconductor.

Valuation & Earnings

This table compares Tower Semiconductor and Canaan’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tower Semiconductor $1.51 billion 3.15 $150.01 million $2.11 20.62
Canaan $782.52 million 0.64 $313.89 million $2.06 1.30

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

Profitability

This table compares Tower Semiconductor and Canaan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tower Semiconductor 13.81% 14.16% 10.32%
Canaan 37.93% 54.70% 39.13%

Risk and Volatility

Tower Semiconductor has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Canaan has a beta of 3.22, indicating that its stock price is 222% more volatile than the S&P 500.

Summary

Canaan beats Tower Semiconductor on 9 of the 14 factors compared between the two stocks.

About Tower Semiconductor

(Get Rating)

Tower Semiconductor Ltd., an independent semiconductor foundry, manufactures and markets analog intensive mixed-signal semiconductor devices in the United States, Japan, other Asia countries, and Europe. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The company also offers wafer fabrication services and design enablement platform for design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.

About Canaan

(Get Rating)

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment 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 and distribution of mining equipment and spare parts. The company has a strategic cooperation with Northern Data AG in the areas of artificial intelligence development, blockchain technology, and datacenter operations. Canaan Inc. was founded in 2013 and is based in Beijing, the People's Republic of China.

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