Comparing Silicon Motion Technology (NASDAQ:SIMO) & Valens Semiconductor (NYSE:VLN)

Valens Semiconductor (NYSE:VLN) and Silicon Motion Technology (NASDAQ:SIMO) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Risk & Volatility

Valens Semiconductor has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Valens Semiconductor and Silicon Motion Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	0	0	1	1	3.50
Silicon Motion Technology	1	0	7	0	2.75

Valens Semiconductor presently has a consensus price target of $4.00, indicating a potential upside of 90.02%. Silicon Motion Technology has a consensus price target of $80.63, indicating a potential upside of 54.72%. Given Valens Semiconductor’s stronger consensus rating and higher probable upside, equities analysts plainly believe Valens Semiconductor is more favorable than Silicon Motion Technology.

Earnings and Valuation

This table compares Valens Semiconductor and Silicon Motion Technology”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$57.86 million	3.87	-$19.66 million	($0.35)	-6.01
Silicon Motion Technology	$803.55 million	2.18	$90.72 million	$2.69	19.37

Silicon Motion Technology has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than Silicon Motion Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Valens Semiconductor	-41.94%	-14.05%	-12.51%
Silicon Motion Technology	11.29%	11.63%	8.77%

Insider & Institutional Ownership

33.9% of Valens Semiconductor shares are owned by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are owned by institutional investors. 58.9% of Valens Semiconductor shares are owned by company insiders. Comparatively, 5.3% of Silicon Motion Technology shares are owned by company 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.

Summary

Silicon Motion Technology beats Valens Semiconductor on 10 of the 15 factors compared between the two stocks.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.

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.