GCT Semiconductor (NYSE:GCTS) vs. Analog Devices (NASDAQ:ADI) Critical Review

Analog Devices (NASDAQ:ADI) and GCT Semiconductor (NYSE:GCTS) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Analog Devices and GCT Semiconductor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Analog Devices	0	3	29	1	2.94
GCT Semiconductor	1	0	2	0	2.33

Analog Devices currently has a consensus target price of $460.55, suggesting a potential upside of 15.99%. GCT Semiconductor has a consensus target price of $3.50, suggesting a potential upside of 129.51%. Given GCT Semiconductor’s higher possible upside, analysts plainly believe GCT Semiconductor is more favorable than Analog Devices.

Institutional and Insider Ownership

86.8% of Analog Devices shares are owned by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are owned by institutional investors. 0.4% of Analog Devices shares are owned by company insiders. Comparatively, 3.8% of GCT Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Analog Devices and GCT Semiconductor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Analog Devices	$11.02 billion	17.46	$2.27 billion	$8.43	47.10
GCT Semiconductor	$2.87 million	48.87	-$43.37 million	($0.80)	-1.91

Analog Devices has higher revenue and earnings than GCT Semiconductor. GCT Semiconductor is trading at a lower price-to-earnings ratio than Analog Devices, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Analog Devices and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Analog Devices	29.79%	16.39%	11.49%
GCT Semiconductor	-1,301.99%	N/A	-189.45%

Risk & Volatility

Analog Devices has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.78, suggesting that its stock price is 78% more volatile than the S&P 500.

Summary

Analog Devices beats GCT Semiconductor on 10 of the 14 factors compared between the two stocks.

About Analog Devices

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. It also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company provides digital signal processing and system products for numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.