Analyzing Valens Semiconductor (NYSE:VLN) and Monolithic Power Systems (NASDAQ:MPWR)

Valens Semiconductor (NYSE:VLN) and Monolithic Power Systems (NASDAQ:MPWR) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Valens Semiconductor and Monolithic Power Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	0	0	1	1	3.50
Monolithic Power Systems	0	2	10	0	2.83

Valens Semiconductor currently has a consensus target price of $4.00, suggesting a potential upside of 29.45%. Monolithic Power Systems has a consensus target price of $828.67, suggesting a potential upside of 40.16%. Given Monolithic Power Systems’ higher possible upside, analysts clearly believe Monolithic Power Systems is more favorable than Valens Semiconductor.

Profitability

This table compares Valens Semiconductor and Monolithic Power Systems’ 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%
Monolithic Power Systems	21.29%	20.44%	16.93%

Volatility and Risk

Valens Semiconductor has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Monolithic Power Systems has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Earnings & Valuation

This table compares Valens Semiconductor and Monolithic Power Systems”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$63.13 million	5.21	-$19.66 million	($0.25)	-12.36
Monolithic Power Systems	$2.04 billion	14.14	$427.37 million	$8.87	66.66

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

Institutional & Insider Ownership

33.9% of Valens Semiconductor shares are owned by institutional investors. Comparatively, 93.5% of Monolithic Power Systems shares are owned by institutional investors. 58.9% of Valens Semiconductor shares are owned by company insiders. Comparatively, 3.7% of Monolithic Power Systems shares are owned by company 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.

Summary

Monolithic Power Systems beats Valens Semiconductor on 12 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 Monolithic Power Systems

Monolithic Power Systems, Inc. engages in the design, development, marketing, and sale of semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. The company provides direct current (DC) to DC integrated circuits (ICs) that are used to convert and control voltages of various electronic systems, such as cloud-based CPU servers, server artificial intelligence applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, 4G and 5G infrastructure, and satellite communications applications. It offers lighting control ICs for backlighting that are used in systems, which provide the light source for LCD panels in computers and notebooks, monitors, car navigation systems, and televisions, as well as for general illumination products. The company sells its products through third-party distributors, value-added resellers, directly to original equipment manufacturers, original design manufacturers, electronic manufacturing service providers, and other end customers. It serves China, Taiwan, South Korea, Europe, Japan, Southeast Asia, the United States, and internationally. Monolithic Power Systems, Inc. was incorporated in 1997 and is headquartered in Kirkland, Washington.