Critical Survey: STMicroelectronics (NYSE:STM) & Valens Semiconductor (NYSE:VLN)

STMicroelectronics (NYSE:STM) and Valens Semiconductor (NYSE:VLN) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Volatility and Risk

STMicroelectronics has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
STMicroelectronics	11.74%	8.92%	6.22%
Valens Semiconductor	-41.94%	-14.05%	-12.51%

Earnings and Valuation

This table compares STMicroelectronics and Valens Semiconductor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STMicroelectronics	$13.27 billion	1.25	$1.56 billion	$1.66	11.14
Valens Semiconductor	$57.86 million	3.39	-$19.66 million	($0.35)	-5.27

STMicroelectronics has higher revenue and earnings than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than STMicroelectronics, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

5.1% of STMicroelectronics shares are held by institutional investors. Comparatively, 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 will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for STMicroelectronics and Valens Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STMicroelectronics	1	9	4	1	2.33
Valens Semiconductor	0	0	1	1	3.50

STMicroelectronics presently has a consensus target price of $31.26, suggesting a potential upside of 69.02%. Valens Semiconductor has a consensus target price of $4.00, suggesting a potential upside of 116.80%. Given Valens Semiconductor’s stronger consensus rating and higher possible upside, analysts clearly believe Valens Semiconductor is more favorable than STMicroelectronics.

Summary

STMicroelectronics beats Valens Semiconductor on 9 of the 14 factors compared between the two stocks.

About STMicroelectronics

STMicroelectronics N.V., together with its subsidiaries, designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates through Automotive and Discrete Group; Analog, MEMS and Sensors Group; and Microcontrollers and Digital ICs Group segments. The Automotive and Discrete Group segment offers automotive integrated circuits (ICs), and discrete and power transistor products. The Analog, MEMS and Sensors Group segment provides industrial application-specific integrated circuits (ASICs) and application-specific standard products (ASSPs); general purpose analog products; custom analog ICs; wireless charging solutions; galvanic isolated gate drivers; low and high voltage amplifiers, comparators, and current-sense amplifiers; MasterGaN, a solution that integrates a silicon driver and GaN power transistors in a single package; wireline and wireless connectivity ICs; touch screen controllers; micro-electro-mechanical systems (MEMS) products, including sensors or actuators; and optical sensing solutions. The Microcontrollers and Digital ICs Group segment offers general purpose and secure microcontrollers; and radio frequency (RF) products. It also offers application-specific standard products for analog, digital and mixed-signal applications. In addition, the company provides assembly and other services. It sells its products through distributors and retailers, as well as through sales representatives. The company serves automotive, industrial, personal electronics and communications equipment, and computers and peripherals markets. STMicroelectronics N.V. was incorporated in 1987 and is headquartered in Geneva, Switzerland.

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.