Critical Review: Wolfspeed (NYSE:WOLF) and Sigma Designs (OTCMKTS:SIGM)

Wolfspeed (NYSE:WOLF) and Sigma Designs (OTCMKTS:SIGM) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings for Wolfspeed and Sigma Designs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wolfspeed	1	10	4	0	2.20
Sigma Designs	0	0	0	0	N/A

Wolfspeed presently has a consensus target price of $35.43, suggesting a potential upside of 84.24%. Given Wolfspeed’s higher probable upside, equities research analysts clearly believe Wolfspeed is more favorable than Sigma Designs.

Volatility and Risk

Wolfspeed has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Sigma Designs has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Profitability

This table compares Wolfspeed and Sigma Designs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wolfspeed	-96.12%	-27.37%	-4.78%
Sigma Designs	N/A	N/A	N/A

Earnings & Valuation

This table compares Wolfspeed and Sigma Designs’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wolfspeed	$921.90 million	2.63	-$329.90 million	($6.46)	-2.98
Sigma Designs	$65.90 million	N/A	-$120.04 million	N/A	N/A

Sigma Designs has lower revenue, but higher earnings than Wolfspeed.

About Wolfspeed

Wolfspeed, Inc. operates as a powerhouse semiconductor company focuses on silicon carbide and gallium nitride (GaN) technologies in Europe, Hong Kong, China, rest of Asia-Pacific, the United States, and internationally. It offers silicon carbide and GaN materials, including silicon carbide bare wafers, epitaxial wafers, and GaN epitaxial layers on silicon carbide wafers to manufacture products for RF, power, and other applications. The company also provides power devices, such as silicon carbide Schottky diodes, metal oxide semiconductor field effect transistors (MOSFETs), and power modules for customers and distributors to use in applications, including electric vehicles comprising charging infrastructure, server power supplies, solar inverters, uninterruptible power supplies, industrial power supplies, and other applications. In addition, it offers RF devices comprising GaN-based die, high-electron mobility transistors, monolithic microwave integrated circuits, and laterally diffused MOSFET power transistors for telecommunications infrastructure, military, and other commercial applications. The company was formerly known as Cree, Inc. and changed its name to Wolfspeed, Inc. in October 2021. Wolfspeed, Inc. was incorporated in 1987 and is headquartered in Durham, North Carolina.

About Sigma Designs

Sigma Designs, Inc., an integrated system-on-chip solutions provider, provides intelligent platforms for use in the home entertainment, and home and industrial control appliances. The company offers mobile Internet of Things solutions used primarily for tracking applications, such as small tags that can be attached to track pets, keys, children, luggage, and vehicles. It also offers legacy products; and software development kits and engineering support services for hardware and software. The company markets and sells its products through direct sales force, manufacturer representatives, distributors, and resellers to end-product manufacturers, original equipment manufacturers, and original design manufacturers in Asia, North America, Europe, and internationally. Sigma Designs, Inc. was founded in 1982 and is headquartered in Fremont, California.