GlobalFoundries (NASDAQ:GFS – Get Free Report) and Aehr Test Systems (NASDAQ:AEHR – Get Free Report) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.
Profitability
This table compares GlobalFoundries and Aehr Test Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GlobalFoundries | 10.36% | 6.69% | 4.69% |
| Aehr Test Systems | -14.25% | -3.83% | -3.36% |
Earnings & Valuation
This table compares GlobalFoundries and Aehr Test Systems”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GlobalFoundries | $6.79 billion | 3.96 | $885.00 million | $1.28 | 38.31 |
| Aehr Test Systems | $50.00 million | 63.78 | -$7.13 million | ($0.24) | -406.83 |
GlobalFoundries has higher revenue and earnings than Aehr Test Systems. Aehr Test Systems is trading at a lower price-to-earnings ratio than GlobalFoundries, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
69.7% of Aehr Test Systems shares are held by institutional investors. 4.6% of Aehr Test Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
GlobalFoundries has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Aehr Test Systems has a beta of 3.47, meaning that its stock price is 247% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings for GlobalFoundries and Aehr Test Systems, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GlobalFoundries | 2 | 10 | 8 | 0 | 2.30 |
| Aehr Test Systems | 1 | 1 | 5 | 1 | 2.75 |
GlobalFoundries presently has a consensus price target of $74.63, indicating a potential upside of 52.19%. Aehr Test Systems has a consensus price target of $132.50, indicating a potential upside of 35.70%. Given GlobalFoundries’ higher possible upside, research analysts plainly believe GlobalFoundries is more favorable than Aehr Test Systems.
Summary
GlobalFoundries beats Aehr Test Systems on 9 of the 15 factors compared between the two stocks.
About GlobalFoundries
GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.
About Aehr Test Systems
Aehr Test Systems provides test solutions for testing, burning-in, and semiconductor devices in wafer level, singulated die, and package part form, and installed systems worldwide. Its product portfolio includes FOX-XP and FOX-NP systems that are full wafer contact and singulated die/module test and burn-in systems that can test, burn-in, and stabilize range of devices, including silicon carbide-based and other power semiconductors, 2D and 3D sensors used in mobile phones, tablets and other computing devices, memory semiconductors, processors, microcontrollers, systems-on-a-chip, and photonics and integrated optical devices. The company also offers FOX-CP system, a low-cost single-wafer compact test solution for logic, memory, and photonic devices; FOX WaferPak Contactor, a full wafer contactor capable of testing wafers up to 300mm that enables integrated circuit manufacturers to perform test, burn-in, and stabilization of full wafers on the FOX-P systems. In addition, it provides FOX DiePak Carrier, a reusable temporary package that enables IC manufacturers to perform final test and burn-in of bare die and modules; and FOX DiePak Loader. The company was incorporated in 1977 and is headquartered in Fremont, California.
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