Critical Analysis: IQE (OTCMKTS:IQEPF) vs. Valens Semiconductor (NYSE:VLN)

IQE (OTCMKTS:IQEPF) and Valens Semiconductor (NYSE:VLN) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Valuation and Earnings

This table compares IQE and Valens Semiconductor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IQE	$150.84 million	0.71	-$48.79 million	N/A	N/A
Valens Semiconductor	$66.59 million	2.95	-$36.58 million	($0.32)	-5.78

Valens Semiconductor has lower revenue, but higher earnings than IQE.

Volatility and Risk

IQE has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for IQE and Valens Semiconductor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IQE	0	0	0	0	0.00
Valens Semiconductor	0	0	1	1	3.50

Valens Semiconductor has a consensus target price of $4.00, suggesting a potential upside of 116.22%. Given Valens Semiconductor’s stronger consensus rating and higher probable upside, analysts plainly believe Valens Semiconductor is more favorable than IQE.

Insider & Institutional Ownership

33.9% of Valens Semiconductor shares are held by institutional investors. 58.9% of Valens Semiconductor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
IQE	N/A	N/A	N/A
Valens Semiconductor	-49.80%	-21.26%	-17.67%

Summary

Valens Semiconductor beats IQE on 8 of the 13 factors compared between the two stocks.

About IQE

IQE plc, together with its subsidiaries, develops, manufactures, and sells advanced semiconductor materials. It operates through three segments: Wireless, Photonics, and CMOS++. The company manufactures and sells compound semiconductor materials for the wireless market which includes radio frequency devices for wireless communications, and photonics market, that includes applications that transmit and sense visible and infrared lights, as well as advanced semiconductor materials related to silicon. It operates in the United States, rest of the Americas, France, Germany, Israel, the United Kingdom, rest of Europe, the Middle East, Africa, the People's Republic of China, Japan, Taiwan, and rest of the Asia-Pacific. The company was founded in 1988 and is headquartered in Cardiff, the United Kingdom.

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.