Ambarella (NASDAQ: AMBA) and Micron Technology (NASDAQ:MU) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, dividends, institutional ownership, profitability and earnings.

Institutional and Insider Ownership

57.1% of Ambarella shares are owned by institutional investors. Comparatively, 79.3% of Micron Technology shares are owned by institutional investors. 5.8% of Ambarella shares are owned by company insiders. Comparatively, 0.7% of Micron Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Ambarella has a beta of 1.58, indicating that its share price is 58% more volatile than the S&P 500. Comparatively, Micron Technology has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Ambarella and Micron Technology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambarella 0 5 7 0 2.58
Micron Technology 1 3 28 0 2.84

Ambarella presently has a consensus target price of $58.50, suggesting a potential upside of 8.17%. Micron Technology has a consensus target price of $45.66, suggesting a potential upside of 10.04%. Given Micron Technology’s stronger consensus rating and higher possible upside, analysts clearly believe Micron Technology is more favorable than Ambarella.

Valuation and Earnings

This table compares Ambarella and Micron Technology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ambarella $323.76 million 5.55 $59.32 million $1.54 35.12
Micron Technology $20.32 billion 2.33 $9.73 billion $4.32 9.60

Micron Technology has higher revenue and earnings than Ambarella. Micron Technology 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 Micron Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambarella 4.61% 2.89% 2.57%
Micron Technology 25.04% 32.09% 16.15%

Summary

Micron Technology beats Ambarella on 11 of the 14 factors compared between the two stocks.

Ambarella Company Profile

Ambarella, Inc. offers semiconductor processing solutions for video that enable high-definition (HD), video capture, sharing and display. The Company operates through the development and sale of low-power, high-definition video products segment. Its system-on-a-chip designs incorporate HD video processing, image processing, audio processing and system functions onto a single chip. In the camera market, its platform enables the creation of video content in wearable cameras, automotive aftermarket cameras, professional and consumer Internet Protocol (IP), security cameras, telepresence cameras and unmanned aerial vehicles. In the infrastructure market, its solutions manage IP video traffic, broadcast encoding and transcoding, and IP video delivery applications. AmbaClear is its image signal processing architecture. AmbaCast is its HD video processing architecture. It offers the MotorVu 3D 360 degrees Surround View reference design for automotive original equipment manufacturer market.

Micron Technology Company Profile

Micron Technology, Inc. is engaged in semiconductor systems. The Company’s portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets.

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