Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) and GSI Technology (NASDAQ:GSIT – Get Free Report) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
Profitability
This table compares Allegro MicroSystems and GSI Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allegro MicroSystems | -2.96% | 8.48% | 6.09% |
| GSI Technology | -77.71% | -54.03% | -41.49% |
Analyst Recommendations
This is a breakdown of current ratings and price targets for Allegro MicroSystems and GSI Technology, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allegro MicroSystems | 0 | 1 | 10 | 0 | 2.91 |
| GSI Technology | 0 | 0 | 0 | 0 | 0.00 |
Insider & Institutional Ownership
56.5% of Allegro MicroSystems shares are held by institutional investors. Comparatively, 33.2% of GSI Technology shares are held by institutional investors. 0.5% of Allegro MicroSystems shares are held by insiders. Comparatively, 34.1% of GSI Technology shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Allegro MicroSystems and GSI Technology”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allegro MicroSystems | $1.05 billion | 4.27 | $152.70 million | ($0.14) | -173.92 |
| GSI Technology | $21.76 million | 3.76 | -$20.09 million | ($0.60) | -5.35 |
Allegro MicroSystems has higher revenue and earnings than GSI Technology. Allegro MicroSystems is trading at a lower price-to-earnings ratio than GSI Technology, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Allegro MicroSystems has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, GSI Technology has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.
Summary
Allegro MicroSystems beats GSI Technology on 12 of the 14 factors compared between the two stocks.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
About GSI Technology
GSI Technology, Inc. designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. It offers associative processing unit products, which are focuses on applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. The company also provides static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs, a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. In addition, it offers radiation-hardened and radiation-tolerant SRAMs for military/defense and aerospace applications, such as networking satellites and missiles. The company's products are used as components in its original equipment manufacturer customers' products, including routers, switches, and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; test and measurement applications consisting of high-speed testers; automotive applications comprising smart cruise control; medical applications, including ultrasound and CAT scan equipment; and audio/video processing. It markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.
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