Critical Analysis: Coda Octopus Group (NASDAQ:CODA) versus Ambarella (NASDAQ:AMBA)

Coda Octopus Group (NASDAQ:CODA) and Ambarella (NASDAQ:AMBA) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Profitability

This table compares Coda Octopus Group and Ambarella’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Coda Octopus Group	14.78%	7.17%	6.57%
Ambarella	-17.18%	-11.02%	-8.60%

Institutional and Insider Ownership

20.1% of Coda Octopus Group shares are owned by institutional investors. Comparatively, 82.1% of Ambarella shares are owned by institutional investors. 21.8% of Coda Octopus Group shares are owned by company insiders. Comparatively, 4.5% of Ambarella shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Coda Octopus Group has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Ambarella has a beta of 2.15, suggesting that its stock price is 115% more volatile than the S&P 500.

Valuation & Earnings

This table compares Coda Octopus Group and Ambarella”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coda Octopus Group	$26.56 million	5.34	$4.13 million	$0.36	34.92
Ambarella	$390.70 million	8.28	-$75.86 million	($1.61)	-45.82

Coda Octopus Group has higher earnings, but lower revenue than Ambarella. Ambarella is trading at a lower price-to-earnings ratio than Coda Octopus Group, 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 Coda Octopus Group and Ambarella, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coda Octopus Group	0	1	1	0	2.50
Ambarella	1	5	7	1	2.57

Ambarella has a consensus price target of $99.75, indicating a potential upside of 35.22%. Given Ambarella’s stronger consensus rating and higher possible upside, analysts plainly believe Ambarella is more favorable than Coda Octopus Group.

Summary

Ambarella beats Coda Octopus Group on 8 of the 15 factors compared between the two stocks.

About Coda Octopus Group

Coda Octopus Group, Inc., together with its subsidiaries, develops, sells, and rentals underwater technologies and equipment for real time 3D imaging, mapping, defense, and survey applications in the Americas, Europe, Australia, Asia, the Middle East, and Africa. The company operates through two segments, Marine Engineering Business and Marine Technology Business. The company's solutions include geophysical systems; GNSS-aided navigation systems (attitude and positioning systems); real time volumetric imaging sonar products; and diver augmented vision display systems. It also offers GeoSurvey, a software and hardware package for acquisition and processing of sidescan sonar and sub-bottom profiler data in oil and gas companies; DA4G, a geophysical hardware; and Survey Engine, a software product that provides post-processing solutions for sidescan sonar and sub-bottom profiler data. In addition, the company offers 3D/4D/5D/6D imaging sonar technology under the Echoscope and Echoscope PIPE name; diving technology under the CodaOctopus DAVD; and operates as a sub-contractor for defense contractors, as well as supplies sub-assemblies for broader mission critical defense systems. It markets and sells its technology solutions for the subsea and underwater markets. Coda Octopus Group, Inc. was founded in 1994 and is headquartered in Orlando, Florida.

About Ambarella

Ambarella, Inc. develops semiconductor solutions that enable high-definition (HD) and ultra HD compression, image signal processing, and artificial intelligence processing worldwide. The company's system-on-a-chip designs integrated HD video processing, image processing, artificial intelligence computer vision algorithms, audio processing, and system functions onto a single chip for delivering video and image quality, differentiated functionality, and low power consumption. Its solutions are used in automotive cameras, such as automotive video recorders, electronic mirrors, front advanced driver assistance system camera, cabin monitoring system and driver monitoring system camera, and central domain controllers for autonomous vehicle; enterprise and public class, and home security camera; and robotics and industrial application, including identification/authentication cameras, robotic products, and sensing cameras, as well as cameras for the enterprise, home, public spaces, and consumer leisure comprising wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing, and virtual reality applications. The company sells its solutions to original design manufacturers and original equipment manufacturers through its direct sales force and distributors. Ambarella, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.