Head to Head Analysis: NXP Semiconductors (NASDAQ:NXPI) & Aehr Test Systems (NASDAQ:AEHR)

NXP Semiconductors (NASDAQ:NXPI) and Aehr Test Systems (NASDAQ:AEHR) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

90.5% of NXP Semiconductors shares are held by institutional investors. Comparatively, 69.7% of Aehr Test Systems shares are held by institutional investors. 0.1% of NXP Semiconductors shares are held by insiders. Comparatively, 4.6% of Aehr Test Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for NXP Semiconductors and Aehr Test Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NXP Semiconductors	1	9	16	0	2.58
Aehr Test Systems	1	1	5	1	2.75

NXP Semiconductors currently has a consensus price target of $295.78, indicating a potential upside of 19.13%. Aehr Test Systems has a consensus price target of $118.75, indicating a potential upside of 121.67%. Given Aehr Test Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Aehr Test Systems is more favorable than NXP Semiconductors.

Volatility & Risk

NXP Semiconductors has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500. Comparatively, Aehr Test Systems has a beta of 3.36, indicating that its stock price is 236% more volatile than the S&P 500.

Profitability

This table compares NXP Semiconductors and Aehr Test Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NXP Semiconductors	23.40%	28.57%	11.87%
Aehr Test Systems	-14.25%	-3.83%	-3.36%

Valuation and Earnings

This table compares NXP Semiconductors 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
NXP Semiconductors	$12.27 billion	5.10	$2.02 billion	$12.72	19.52
Aehr Test Systems	$50.00 million	34.99	-$7.13 million	($0.24)	-223.21

NXP Semiconductors has higher revenue and earnings than Aehr Test Systems. Aehr Test Systems is trading at a lower price-to-earnings ratio than NXP Semiconductors, indicating that it is currently the more affordable of the two stocks.

Summary

NXP Semiconductors beats Aehr Test Systems on 9 of the 15 factors compared between the two stocks.

About NXP Semiconductors

NXP Semiconductors N.V. offers various semiconductor products. The company's product portfolio includes microcontrollers; application processors, including i.MX application processors, and i.MX 8 and 9 family of applications processors; communication processors; wireless connectivity solutions, such as near field communications, ultra-wideband, Bluetooth low-energy, Zigbee, and Wi-Fi and Wi-Fi/Bluetooth integrated SoCs; analog and interface devices; radio frequency power amplifiers; and security controllers, as well as semiconductor-based environmental and inertial sensors, including pressure, inertial, magnetic, and gyroscopic sensors. Its products are used in various applications, including automotive, industrial and Internet of Things, mobile, and communication infrastructure. The company markets its products to various original equipment manufacturers, contract manufacturers, and distributors. It operates in China, the Netherlands, the United States, Singapore, Germany, Japan, South Korea, Taiwan, and internationally. N.V. was incorporated in 2006 and is headquartered in Eindhoven, the Netherlands.

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.