Inphi (IPHI) vs. SemiLEDs (LEDS) Critical Survey

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Inphi (NYSE: IPHI) and SemiLEDs (NASDAQ:LEDS) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Valuation and Earnings

This table compares Inphi and SemiLEDs’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inphi $348.20 million 4.33 -$74.90 million $0.58 59.41
SemiLEDs $9.21 million 1.39 -$4.09 million N/A N/A

SemiLEDs has lower revenue, but higher earnings than Inphi.

Institutional & Insider Ownership

1.0% of SemiLEDs shares are owned by institutional investors. 3.4% of Inphi shares are owned by insiders. Comparatively, 40.1% of SemiLEDs 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 Recommendations

This is a breakdown of current ratings and recommmendations for Inphi and SemiLEDs, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inphi 2 3 10 0 2.53
SemiLEDs 0 0 0 0 N/A

Inphi presently has a consensus target price of $39.60, indicating a potential upside of 14.92%. Given Inphi’s higher possible upside, analysts plainly believe Inphi is more favorable than SemiLEDs.

Volatility & Risk

Inphi has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, SemiLEDs has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.

Profitability

This table compares Inphi and SemiLEDs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inphi -27.52% -0.01% -0.01%
SemiLEDs -45.98% -45.07% -19.82%

Summary

Inphi beats SemiLEDs on 7 of the 11 factors compared between the two stocks.

Inphi Company Profile

Inphi Corporation provides high-speed analog and mixed signal semiconductor solutions for the communications, datacenter, and computing markets worldwide. The company's analog and mixed signal semiconductor solutions offers high signal integrity at data speeds while reducing system power consumption. Its semiconductor solutions are designed to address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing environments, and enable the rollout of next generation communications and datacenter infrastructures. Its solutions provide a high-speed interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, datacenters and enterprise servers, storage platforms, test and measurement systems, and military systems. The company also provides 25G to 600G high-speed analog semiconductor solutions for the communications market. Its products perform a range of functions, such as amplifying, encoding, multiplexing, demultiplexing, retiming signals at speeds up to 400 Gbps. Inphi Corporation sells its products directly through its sales force, as well as through a network of sales representatives and distributors to original equipment manufacturers. The company was formerly known as TCom Communications, Inc. and changed its name to Inphi Corporation in February 2001. Inphi Corporation was incorporated in 2000 and is headquartered in Santa Clara, California.

SemiLEDs Company Profile

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components in the United States, Taiwan, the Netherlands, France, China, Germany, Hong Kong, and internationally. The company's products are used for general lighting applications, including street lights and commercial, industrial, system and residential lighting. Its LED chips also used in specialty industrial applications, such as ultraviolet, or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, architectural lighting and entertainment lighting. The company also sells enhanced vertical, LED product series in blue, white, green, and UV in selected markets; LED chips to packagers or to distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packages and sells its LED chips into LED components to distributors. SemiLEDs Corporation was incorporated in 2005 and is headquartered in Chunan, Taiwan.

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