Comparing e.Digital (OTCMKTS:EDIG) and Arteris (NASDAQ:AIP)

e.Digital (OTCMKTS:EDIG) and Arteris (NASDAQ:AIP) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for e.Digital and Arteris, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
e.Digital	0	0	0	0	N/A
Arteris	0	1	4	0	2.80

Arteris has a consensus target price of $13.40, suggesting a potential upside of 82.56%. Given Arteris’ higher possible upside, analysts clearly believe Arteris is more favorable than e.Digital.

Valuation and Earnings

This table compares e.Digital and Arteris’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
e.Digital	$700,000.00	0.04	-$1.27 million	N/A	N/A
Arteris	$53.67 million	5.26	-$36.87 million	($1.03)	-7.13

e.Digital has higher earnings, but lower revenue than Arteris.

Insider and Institutional Ownership

64.4% of Arteris shares are owned by institutional investors. 2.3% of e.Digital shares are owned by company insiders. Comparatively, 33.7% of Arteris shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
e.Digital	N/A	N/A	N/A
Arteris	-69.70%	-198.35%	-35.33%

Volatility and Risk

e.Digital has a beta of 2.02, indicating that its stock price is 102% more volatile than the S&P 500. Comparatively, Arteris has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Summary

Arteris beats e.Digital on 6 of the 11 factors compared between the two stocks.

About e.Digital

e.Digital Corporation engages in developing and marketing an intellectual property portfolio of context and interpersonal awareness systems, advanced data security technologies, secure communication technologies, and other technologies. It is involved in licensing and enforcing its Nunchi portfolio of patents related to context and interpersonal awareness systems; microSignet data security technology based on characteristics in semi-conductors; Synap security system, method, and apparatus to solve the issues of encryption key generation and exchange; and other technologies. The company was formerly known as Norris Communications, Inc. and changed its name to e.Digital Corporation in January 1999. e.Digital Corporation was founded in 1988 and is based in San Diego, California.

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.