Transphorm (NASDAQ:TGAN) vs. Tower Semiconductor (NASDAQ:TSEM) Head-To-Head Contrast

Tower Semiconductor (NASDAQ:TSEM) and Transphorm (NASDAQ:TGAN) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Risk and Volatility

Tower Semiconductor has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Transphorm has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Valuation and Earnings

This table compares Tower Semiconductor and Transphorm’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tower Semiconductor	$1.42 billion	3.00	$518.49 million	$4.41	8.86
Transphorm	$16.51 million	19.14	-$30.60 million	($0.69)	-7.39

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

Analyst Recommendations

This is a summary of recent ratings for Tower Semiconductor and Transphorm, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tower Semiconductor	0	0	3	0	3.00
Transphorm	0	2	0	0	2.00

Tower Semiconductor presently has a consensus price target of $46.33, indicating a potential upside of 18.59%. Transphorm has a consensus price target of $5.75, indicating a potential upside of 12.75%. Given Tower Semiconductor’s stronger consensus rating and higher probable upside, research analysts clearly believe Tower Semiconductor is more favorable than Transphorm.

Insider & Institutional Ownership

70.5% of Tower Semiconductor shares are owned by institutional investors. Comparatively, 66.5% of Transphorm shares are owned by institutional investors. 1.0% of Tower Semiconductor shares are owned by company insiders. Comparatively, 2.5% of Transphorm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Tower Semiconductor and Transphorm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tower Semiconductor	35.27%	8.78%	7.21%
Transphorm	-177.91%	-149.03%	-86.65%

Summary

Tower Semiconductor beats Transphorm on 12 of the 14 factors compared between the two stocks.

About Tower Semiconductor

Tower Semiconductor Ltd., an independent semiconductor foundry, focus on specialty process technologies to manufacture analog intensive mixed-signal semiconductor devices in Israel, the United States, Japan, Europe, and internationally. It provides various customizable process technologies, including SiGe, BiCMOS, mixed signal/CMOS, RF CMOS, CMOS image sensor, integrated power management, and MEMS. The Company also provides design enablement platform for quick and accurate design cycle, as well as transfer optimization and development process services to integrated device manufacturers and fabless companies. It serves various markets, such as consumer electronics, personal computers, communications, automotive, industrial, aerospace, military, and medical device products. The company was incorporated in 1993 and is headquartered in Migdal Haemek, Israel.

About Transphorm

Transphorm, Inc., a semiconductor company, develops, manufactures, and sells gallium nitride (GaN) semiconductor components for high voltage power conversion applications in Mainland China, Hong Kong, Taiwan, the United States, Japan, South Korea, India, and Europe. The company's products include GaN field effect transistors in various packages. Its GaN devices allows customers to design power systems creating functional value in various end products, including smartphone power adapters/fast-chargers, power supplies for datacenter servers/communication, industrial power converters, chargers/converters/inverters for electric vehicles, and other applications. The company offers its products through regional distributors and sales representatives. Transphorm, Inc. was founded in 2007 and is headquartered in Goleta, California.