Head-To-Head Survey: Silicon Motion Technology (NASDAQ:SIMO) vs. ARM (NASDAQ:ARM)

ARM (NASDAQ:ARM) and Silicon Motion Technology (NASDAQ:SIMO) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Insider & Institutional Ownership

7.5% of ARM shares are owned by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are owned by institutional investors. 5.3% of Silicon Motion Technology shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares ARM and Silicon Motion Technology’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$2.70 billion	38.78	N/A	N/A	N/A
Silicon Motion Technology	$639.14 million	3.79	$52.87 million	$1.58	46.42

Silicon Motion Technology has lower revenue, but higher earnings than ARM.

Analyst Recommendations

This is a breakdown of current ratings for ARM and Silicon Motion Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	12	14	0	2.48
Silicon Motion Technology	0	0	6	0	3.00

Silicon Motion Technology has a consensus target price of $87.57, indicating a potential upside of 19.39%. Given Silicon Motion Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Silicon Motion Technology is more favorable than ARM.

Profitability

This table compares ARM and Silicon Motion Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	N/A	17.51%	11.49%
Silicon Motion Technology	8.27%	7.01%	5.49%

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.

About Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.