Ambarella (NASDAQ:AMBA – Get Free Report) and SmartKem (NASDAQ:SMTK – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
Volatility & Risk
Ambarella has a beta of 1.95, suggesting that its stock price is 95% more volatile than the S&P 500. Comparatively, SmartKem has a beta of 5.24, suggesting that its stock price is 424% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for Ambarella and SmartKem, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ambarella | 1 | 4 | 7 | 2 | 2.71 |
| SmartKem | 1 | 0 | 0 | 0 | 1.00 |
Valuation and Earnings
This table compares Ambarella and SmartKem”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ambarella | $284.86 million | 9.68 | -$117.13 million | ($1.88) | -34.06 |
| SmartKem | $178,000.00 | 27.69 | -$10.33 million | ($2.27) | -0.35 |
SmartKem has lower revenue, but higher earnings than Ambarella. Ambarella is trading at a lower price-to-earnings ratio than SmartKem, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
82.1% of Ambarella shares are held by institutional investors. 5.3% of Ambarella shares are held by insiders. Comparatively, 8.7% of SmartKem shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Ambarella and SmartKem’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ambarella | -21.31% | -13.02% | -10.52% |
| SmartKem | -6,262.36% | -610.88% | -199.55% |
Summary
Ambarella beats SmartKem on 10 of the 15 factors compared between the two stocks.
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.
About SmartKem
SmartKem, Inc. develops electronics transistors using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including next generation MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor. The company was founded on September 21, 2018 and is headquartered in Blackley, the United Kingdom.
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