Vimicro International (NASDAQ: VIMC) and Pixelworks (NASDAQ:PXLW) are both small-cap technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations for Vimicro International and Pixelworks, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vimicro International 0 0 0 0 N/A
Pixelworks 0 0 3 0 3.00

Pixelworks has a consensus price target of $7.00, indicating a potential upside of 26.35%. Given Pixelworks’ higher possible upside, analysts clearly believe Pixelworks is more favorable than Vimicro International.

Profitability

This table compares Vimicro International and Pixelworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vimicro International 20.38% 17.78% 8.86%
Pixelworks -0.36% 20.65% 11.97%

Institutional & Insider Ownership

37.8% of Pixelworks shares are held by institutional investors. 4.5% of Pixelworks shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Vimicro International and Pixelworks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vimicro International N/A N/A N/A $0.29 46.31
Pixelworks $53.39 million 3.55 -$11.10 million N/A N/A

Vimicro International has higher earnings, but lower revenue than Pixelworks.

Risk and Volatility

Vimicro International has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Summary

Pixelworks beats Vimicro International on 8 of the 10 factors compared between the two stocks.

Vimicro International Company Profile

Vimicro International Corporation is a holding company. The Company is a provider of video surveillance technology and solutions that designs, develops and markets a range of video surveillance products and solutions to Government entities, private enterprises and consumers. It operates in two segments: Video surveillance solutions business and Video processors business. Video surveillance solutions business, which refers business activities that are engaged in the design, manufacture and sale of video surveillance solutions and products and provision of related services, and Video processors business, which refers business activities that are engaged in the design, manufacture and sale of video processors, including the video processors used in video surveillance solutions and personal computer camera processors. It provides video surveillance products and solutions ranging from front-end Internet Protocol cameras to back-end software platform using its chip and algorithm technology.

Pixelworks Company Profile

Pixelworks, Inc. designs, develops and markets video and pixel processing semiconductors, intellectual property cores, software and custom application specific integrated circuit (ASIC) solutions for digital video applications. The Company is engaged in the design and development of integrated circuits (ICs) for use in electronic display devices. It provides its customers with software development tools and with software that provides basic functionality for its ICs and enables connectivity of its customers’ products. Its primary target markets include digital projection systems, Ultrabook devices, tablets and smartphones. Its video display processing technologies include Halo Free Motion Estimation and Motion Compensation (MEMC), Advanced Scaling, Mobile Video Display Processing, and Vuemagic and Networked Displays. Its primary video display processor product categories include ImageProcessor ICs, Video Co-Processor ICs and Networked Display ICs.

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