Contrasting Alpha and Omega Semiconductor (NASDAQ:AOSL) & ARM (NASDAQ:ARM)

Alpha and Omega Semiconductor (NASDAQ:AOSL) and ARM (NASDAQ:ARM) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Alpha and Omega Semiconductor and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alpha and Omega Semiconductor	-1.69%	-0.33%	-0.25%
ARM	12.12%	18.97%	13.23%

Institutional & Insider Ownership

79.0% of Alpha and Omega Semiconductor shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 17.9% of Alpha and Omega Semiconductor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Alpha and Omega Semiconductor and ARM, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alpha and Omega Semiconductor	1	0	2	0	2.33
ARM	1	10	16	1	2.61

Alpha and Omega Semiconductor currently has a consensus price target of $42.67, suggesting a potential upside of 30.04%. ARM has a consensus price target of $121.56, suggesting a potential downside of 3.17%. Given Alpha and Omega Semiconductor’s higher probable upside, equities analysts clearly believe Alpha and Omega Semiconductor is more favorable than ARM.

Earnings & Valuation

This table compares Alpha and Omega Semiconductor and ARM’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alpha and Omega Semiconductor	$657.27 million	1.45	-$11.08 million	($0.34)	-96.50
ARM	$3.23 billion	40.69	$306.00 million	N/A	N/A

ARM has higher revenue and earnings than Alpha and Omega Semiconductor.

Summary

ARM beats Alpha and Omega Semiconductor on 10 of the 13 factors compared between the two stocks.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers 650V SiC MOSFET, a switching solutions for solar inverters, motor drives, industrial power supplies, and energy storage systems. Further, it provides 750V SiC MOSFET for electric vehicle systems such as the on-board charge; transient voltage suppressors; silicon carbide product for industrial applications, such as solar inverters, UPS, and battery management systems. Alpha and Omega Semiconductor Limited was incorporated in 2000 and is headquartered in Sunnyvale, California.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.