Head-To-Head Analysis: Ambarella (NASDAQ:AMBA) vs. SiTime (NASDAQ:SITM)

Ambarella (NASDAQ:AMBA) and SiTime (NASDAQ:SITM) are both mid-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings for Ambarella and SiTime, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambarella 1 3 10 0 2.64
SiTime 0 0 5 0 3.00

Ambarella presently has a consensus price target of $133.67, indicating a potential downside of 8.80%. SiTime has a consensus price target of $218.00, indicating a potential downside of 1.58%. Given SiTime’s stronger consensus rating and higher probable upside, analysts plainly believe SiTime is more favorable than Ambarella.

Earnings & Valuation

This table compares Ambarella and SiTime’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ambarella $222.99 million 24.10 -$59.79 million ($1.69) -86.72
SiTime $116.16 million 36.35 -$9.37 million ($0.58) -381.91

SiTime has lower revenue, but higher earnings than Ambarella. SiTime is trading at a lower price-to-earnings ratio than Ambarella, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ambarella and SiTime’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambarella -17.76% -9.69% -8.08%
SiTime -0.14% -0.11% -0.09%

Risk & Volatility

Ambarella has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, SiTime has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Institutional & Insider Ownership

74.5% of Ambarella shares are owned by institutional investors. Comparatively, 63.1% of SiTime shares are owned by institutional investors. 5.6% of Ambarella shares are owned by company insiders. Comparatively, 0.8% of SiTime shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

SiTime beats Ambarella on 8 of the 14 factors compared between the two stocks.

About Ambarella

Ambarella, Inc. engages in the development and sale of video compression, image processing, and computer vision solutions. It offers processors and software that cater to end markets including security cameras, automotive cameras, industrial and robotic applications, and consumer applications. The company was founded by Feng Ming Wang and Leslie D. Kohn on January 15, 2004 and is headquartered in Santa Clara, CA.

About SiTime

SiTime Corporation provides silicon timing systems in Taiwan, Hong Kong, the United States, and internationally. It provides resonators and clock integrated circuits, and various types of oscillators. The company's solutions are used in various markets, including enterprise and telecommunications infrastructure, automotive, industrial, Internet of Things, mobile, and aerospace and defense. It offers its products through distributors and resellers. The company was incorporated in 2003 and is headquartered in Santa Clara, California. SiTime Corporation was formerly a subsidiary of MegaChips Corporation.

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