Head to Head Review: Arteris (NASDAQ:AIP) and Audioeye (NASDAQ:AEYE)

Audioeye (NASDAQ:AEYE) and Arteris (NASDAQ:AIP) are both small-cap technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Volatility & Risk

Audioeye has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Arteris has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.

Institutional and Insider Ownership

51.1% of Audioeye shares are owned by institutional investors. Comparatively, 64.4% of Arteris shares are owned by institutional investors. 25.9% of Audioeye shares are owned by company insiders. Comparatively, 23.3% of Arteris shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Audioeye and Arteris, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Audioeye	1	1	4	0	2.50
Arteris	1	0	6	0	2.71

Audioeye presently has a consensus target price of $14.62, suggesting a potential upside of 81.00%. Arteris has a consensus target price of $37.29, suggesting a potential upside of 95.62%. Given Arteris’ stronger consensus rating and higher probable upside, analysts plainly believe Arteris is more favorable than Audioeye.

Earnings and Valuation

This table compares Audioeye and Arteris”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Audioeye	$40.31 million	2.52	-$3.08 million	($0.36)	-22.44
Arteris	$84.61 million	11.07	-$34.75 million	($0.87)	-21.91

Audioeye has higher earnings, but lower revenue than Arteris. Audioeye is trading at a lower price-to-earnings ratio than Arteris, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Audioeye and Arteris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Audioeye	-10.92%	121.59%	15.45%
Arteris	-46.70%	-295.96%	-22.26%

Summary

Arteris beats Audioeye on 8 of the 14 factors compared between the two stocks.

About Audioeye

AudioEye, Inc. provides patented, internet content publication, distribution software, and related services to Internet and other media to people regardless of their device, location, or disabilities in the United States. Its software and services enable conversion of digital content into accessible formats and allows for real time distribution to end users on any Internet connected device. The company offers AudioEye, an always-on testing, remediation, and monitoring solution that improves conformance with web content accessibility guidelines; identifies and fixes the accessibility errors and addresses a range of disabilities, including dyslexia, color blindness, epilepsy, and others; and provides additional solutions to provide for enhanced compliance and accessibility, including periodic auditing, human assisted technological remediations, and legal support services, as well as PDF remediation services, Native Mobile App and audit reports to help customers with their digital accessibility needs. The company serves small- and medium-sized businesses, corporate enterprises, non-profit organizations, and federal government agencies, as well as federal, state, and local governments and agencies through content management system partners, platform and agency partners, authorized resellers, and the marketplace. AudioEye, Inc. was incorporated in 2005 and is based in Tucson, Arizona.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.