ARM (NASDAQ:ARM – Get Free Report) and Credo Technology Group (NASDAQ:CRDO – Get Free Report) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.
Analyst Ratings
This is a breakdown of recent ratings for ARM and Credo Technology Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ARM | 1 | 8 | 17 | 0 | 2.62 |
| Credo Technology Group | 0 | 2 | 15 | 2 | 3.00 |
ARM presently has a consensus price target of $297.65, suggesting a potential upside of 6.66%. Credo Technology Group has a consensus price target of $266.17, suggesting a potential upside of 14.01%. Given Credo Technology Group’s stronger consensus rating and higher probable upside, analysts clearly believe Credo Technology Group is more favorable than ARM.
Risk & Volatility
Profitability
This table compares ARM and Credo Technology Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ARM | 18.37% | 12.43% | 9.48% |
| Credo Technology Group | 35.37% | 32.30% | 28.88% |
Valuation and Earnings
This table compares ARM and Credo Technology Group”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ARM | $4.92 billion | 60.59 | $904.00 million | $0.84 | 332.24 |
| Credo Technology Group | $1.34 billion | 32.61 | $472.28 million | $2.48 | 94.13 |
ARM has higher revenue and earnings than Credo Technology Group. Credo Technology Group is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
7.5% of ARM shares are owned by institutional investors. Comparatively, 80.5% of Credo Technology Group shares are owned by institutional investors. 11.8% of Credo Technology Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Credo Technology Group beats ARM on 9 of the 15 factors compared between the two stocks.
About ARM
Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.
About Credo Technology Group
Credo Technology Group Holding Ltd provides various high-speed connectivity Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.
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