Critical Analysis: MACOM Technology Solutions (NASDAQ:MTSI) & Credo Technology Group (NASDAQ:CRDO)


MACOM Technology Solutions ( NASDAQ:MTSI – Get Rating ) and Credo Technology Group ( NASDAQ:CRDO – Get Rating ) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and yield.

Institutional and internal ownership

97.6% of MACOM Technology Solutions shares are held by institutional investors. Comparatively, 0.4% of Credo Technology Group shares are held by institutional investors. 28.3% of MACOM Technology Solutions shares are held by company insiders. Strong institutional ownership is an indication that major financial managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for MACOM Technology Solutions and Credo Technology Group as provided by MarketBeat.

Estimates for sale Hold the ratings Buy ratings Strong buy ratings Rating score
MACOM Technology Solutions 0 0 7 0 3.00
Credo Technology Group 0 0 8 0 3.00

MACOM Technology Solutions currently has a consensus target price of $75.30, suggesting a potential upside of 70.09%. Credo Technology Group has a consensus target price of $19.50, suggesting a potential upside of 72.72%. Given Credo Technology Group’s higher probable upside, analysts plainly believe Credo Technology Group is more favorable than MACOM Technology Solutions.

Profitability

This table compares the net margins, return on equity and return on assets of MACOM Technology Solutions and Credo Technology Group.

Net margins Return on capital Return on assets
MACOM Technology Solutions 31.70% 27.62% 11.53%
Credo Technology Group N/A N/A N/A

Earnings and rating

This table compares MACOM Technology Solutions and Credo Technology Group’s gross revenue, earnings per share and valuation.

Gross income Price/sales ratio Net income Earnings per share Price/earnings ratio
MACOM Technology Solutions $606.92 million 5.10 $37.97 million $2.82 15.70
Credo Technology Group $106.48 million 15.41 -$22.18 million N/A N/A

MACOM Technology Solutions has higher revenue and earnings than Credo Technology Group.

Summary

MACOM Technology Solutions beats Credo Technology Group on 7 of the 10 factors compared between the two stocks.

About MACOM Technology Solutions (Get Rating)

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications in the radio frequency (RF), microwave, millimeter and light spectrum in the United States, China, Asia Pacific and internationally. The company offers a portfolio of standard and consumer devices, including integrated circuits, multichip modules, diodes, amplifiers, switches and switching limiters, passive and active components and subsystems. Its semiconductor products are electronic components that are incorporated into electronic systems such as wireless base stations, high-capacity optical networks, radar and medical systems, and test and measurement. The company serves a variety of markets including telecommunications, which includes carrier infrastructure that includes long-haul/metro, 5G and fiber to X/passive optical network; industrial and defense, including military and commercial radars, radio frequency jammers, electronic countermeasures and data communications, as well as multi-market applications such as industrial, medical, test and measurement and scientific applications; and data centers. It sells its products through direct sales, application engineering personnel, independent sales representatives, distributors and distributors. The company was founded in 1950 and is headquartered in Lowell, Massachusetts.

About Credo Technology Group (Get Rating)

Credo Technology Group Holding Ltd provides a variety of high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Mexico, Malaysia, Hong Kong and internationally. Its products include integrated circuits, active power cables and SerDes chiplets, which are based on its serializer/deserializer and digital signal processor technologies. The company’s intellectual property solutions consist of SerDes IP licensing. The company was founded in 2008 and is headquartered in San Jose, California.



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