Financial Analysis: Magna International (NYSE:MGA) versus Cepton (NASDAQ:CPTN)

Magna International (NYSE:MGA) and Cepton (NASDAQ:CPTN) are both auto/tires/trucks companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Magna International and Cepton, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magna International	0	12	5	0	2.29
Cepton	0	2	0	0	2.00

Magna International currently has a consensus target price of $54.88, indicating a potential upside of 25.74%. Given Magna International’s stronger consensus rating and higher probable upside, equities analysts clearly believe Magna International is more favorable than Cepton.

Valuation & Earnings

This table compares Magna International and Cepton’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magna International	$42.80 billion	0.29	$1.21 billion	$3.52	12.40
Cepton	$13.06 million	3.16	-$48.55 million	($2.56)	-1.01

Magna International has higher revenue and earnings than Cepton. Cepton is trading at a lower price-to-earnings ratio than Magna International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Magna International and Cepton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Magna International	2.35%	12.96%	4.81%
Cepton	-300.64%	N/A	-47.27%

Risk and Volatility

Magna International has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500. Comparatively, Cepton has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500.

Institutional and Insider Ownership

67.5% of Magna International shares are held by institutional investors. Comparatively, 68.2% of Cepton shares are held by institutional investors. 0.5% of Magna International shares are held by company insiders. Comparatively, 36.1% of Cepton shares are held 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.

Summary

Magna International beats Cepton on 11 of the 14 factors compared between the two stocks.

About Magna International

Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. It operates through four segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles. The Body Exteriors & Structures segment provides body and chassis system, battery enclosures, and engineering and testing; and exteriors, including fascia and trims, front end modules, integration panels, liftgate modules, active aerodynamics, engineered glass, running boards, truck bed access products, breakthrough lightings, side doors, and greenhouse products. The Power & Vision segment offers electric drive systems and components, such as emotors, inverters, onboard chargers, gearboxes, and e-clutch; dedicated hybrid drives, dual and hybrid dual clutch, and manual transmissions; AWD/4WD products and rear drive modules; transmission, driveline components, and ICE; far camera module, remote camera heads, interior sensing camera, radars, thermal sensing, and domain controllers; interior and exterior mirrors, camera monitoring system driver/occupant monitoring systems, and smart actuators; forward and rear lighting, and lit grilles/panels/displays; latching system, door modules, charge port doors, power system, hinges, and door handles; and modular and textile folding roofs, and hard and soft tops. The Seating Systems segment provides seat structures, mechanism and hardware solutions, and foam and trim products. The Complete Vehicles segment offers vehicle engineering and manufacturing services. Magna International Inc. was founded in 1957 and is headquartered in Aurora, Canada.

About Cepton

Cepton, Inc. provides lidar-based solutions for automotive, smart cities, smart spaces, and smart industrial applications in the United States, Japan, China, and internationally. The company offers autograde lidar sensors, including Cepton Ultra, a slimmest lidar with MagnoSteer technology and proprietary ASIC chipset, enabling a combination of 300-meter range at 10% reflectivity and 0.05° resolution; Vista-X, a compact lidar solution with a range of up to 200m for long-range applications in ADAS L2+/L3, AV L4/L5, and suitable for smart infrastructure applications; and Nova, an extremely-small form factor lidar solution with a range of up to 30m for near-range applications in ADAS L2+/L3, AV L4/L5, and suitable for smart infrastructure applications. It also provides industrial grade lidar sensors, such as Vista-P, a compact lidar solution with a range of up to 200m for long-range applications in ADAS L2+/L3, AV L4/L5, and smart infrastructure applications; and Sora-P, an ultra-high scan rate, compact, and quasi line-scanning lidar solution that delivers high-fidelity profiling of objects moving at high speeds for free flow tolling and other industrial applications. The company was founded in 2016 and is headquartered in San Jose, California.