Kulicke and Soffa Industries (NASDAQ: KLIC) and PDF Solutions (NASDAQ:PDFS) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.

Insider & Institutional Ownership

98.5% of Kulicke and Soffa Industries shares are held by institutional investors. Comparatively, 78.0% of PDF Solutions shares are held by institutional investors. 1.0% of Kulicke and Soffa Industries shares are held by company insiders. Comparatively, 16.2% of PDF Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Kulicke and Soffa Industries and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kulicke and Soffa Industries 11.61% 11.88% 9.53%
PDF Solutions 5.29% 2.78% 2.49%

Valuation and Earnings

This table compares Kulicke and Soffa Industries and PDF Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kulicke and Soffa Industries $738.99 million 1.82 $125.75 million $1.20 15.75
PDF Solutions $104.27 million 4.69 $9.44 million $0.18 84.11

Kulicke and Soffa Industries has higher revenue and earnings than PDF Solutions. Kulicke and Soffa Industries is trading at a lower price-to-earnings ratio than PDF Solutions, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Kulicke and Soffa Industries and PDF Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kulicke and Soffa Industries 0 1 1 0 2.50
PDF Solutions 0 2 1 0 2.33

Kulicke and Soffa Industries currently has a consensus target price of $31.00, suggesting a potential upside of 64.02%. PDF Solutions has a consensus target price of $23.33, suggesting a potential upside of 54.12%. Given Kulicke and Soffa Industries’ stronger consensus rating and higher possible upside, equities analysts plainly believe Kulicke and Soffa Industries is more favorable than PDF Solutions.

Volatility and Risk

Kulicke and Soffa Industries has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Summary

Kulicke and Soffa Industries beats PDF Solutions on 9 of the 13 factors compared between the two stocks.

Kulicke and Soffa Industries Company Profile

Kulicke and Soffa Industries, Inc. designs, manufactures and sells capital equipment and expendable tools, as well as services, maintains, repairs and upgrades equipment, all used to assemble semiconductor devices. The Company supplies a range of bonding equipment. The Company operates through two segments: Equipment and Expendable Tools. The Equipment segment manufactures and sells a line of ball bonders, wedge bonders, advanced packaging and surface mount technology solutions. The Expendable Tools segment manufactures and sells expendable tools for a range of semiconductor packaging applications. It offers capital equipment and expendable tools used to assemble semiconductor devices, including integrated circuits, high and low powered discrete devices, light-emitting diodes and power modules. Its customers primarily consist of semiconductor device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers and automotive electronics suppliers.

PDF Solutions Company Profile

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

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