Comparing Arteris (NASDAQ:AIP) & Photronics (NASDAQ:PLAB)

Arteris (NASDAQ:AIP) and Photronics (NASDAQ:PLAB) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Earnings and Valuation

This table compares Arteris and Photronics’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arteris	$53.46 million	6.35	-$36.87 million	($1.03)	-8.56
Photronics	$897.32 million	2.05	$125.49 million	$2.23	13.01

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

Risk & Volatility

Arteris has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Photronics has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Arteris and Photronics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arteris	0	0	4	0	3.00
Photronics	0	1	0	0	2.00

Arteris presently has a consensus price target of $14.50, indicating a potential upside of 64.40%. Photronics has a consensus price target of $21.00, indicating a potential downside of 27.64%. Given Arteris’ stronger consensus rating and higher possible upside, research analysts clearly believe Arteris is more favorable than Photronics.

Institutional and Insider Ownership

64.4% of Arteris shares are owned by institutional investors. Comparatively, 88.4% of Photronics shares are owned by institutional investors. 36.1% of Arteris shares are owned by insiders. Comparatively, 3.9% of Photronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Arteris and Photronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arteris	-69.70%	-198.35%	-35.33%
Photronics	15.34%	10.37%	8.69%

Summary

Photronics beats Arteris on 9 of the 14 factors compared between the two stocks.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.

About Photronics

Photronics, Inc., together with its subsidiaries, engages in the manufacture and sale of photomask products and services in the United States, Taiwan, China, Korea, Europe, and internationally. It offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs); and to transfer circuit patterns onto semiconductor wafers, and FDP substrates. The company offers electrical and optical components. It sells its products to semiconductor and FPD manufacturers, designers, and foundries, as well as to other high-performance electronics manufacturers through its sales personnel and customer service representatives. The company was formerly known as Photronic Labs, Inc. and changed its name to Photronics, Inc. in 1990. Photronics, Inc. was incorporated in 1969 and is based in Brookfield, Connecticut.