Analyzing GCT Semiconductor (NYSE:GCTS) and Credo Technology Group (NASDAQ:CRDO)

GCT Semiconductor (NYSE:GCTS) and Credo Technology Group (NASDAQ:CRDO) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Risk & Volatility

GCT Semiconductor has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Credo Technology Group has a beta of 2.72, indicating that its share price is 172% more volatile than the S&P 500.

Earnings and Valuation

This table compares GCT Semiconductor and Credo Technology Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	$2.87 million	32.80	-$43.37 million	($0.81)	-1.60
Credo Technology Group	$436.77 million	46.54	$52.18 million	$1.80	61.23

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

Insider & Institutional Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. Comparatively, 80.5% of Credo Technology Group shares are owned by institutional investors. 5.4% of GCT Semiconductor shares are owned by insiders. Comparatively, 11.8% of Credo Technology Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for GCT Semiconductor and Credo Technology Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	2	0	2	0	2.00
Credo Technology Group	0	2	13	2	3.00

GCT Semiconductor presently has a consensus target price of $3.50, suggesting a potential upside of 169.44%. Credo Technology Group has a consensus target price of $206.33, suggesting a potential upside of 87.22%. Given GCT Semiconductor’s higher probable upside, equities analysts clearly believe GCT Semiconductor is more favorable than Credo Technology Group.

Profitability

This table compares GCT Semiconductor and Credo Technology Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	-1,513.33%	N/A	-231.27%
Credo Technology Group	31.81%	29.63%	26.20%

Summary

Credo Technology Group beats GCT Semiconductor on 14 of the 15 factors compared between the two stocks.

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.

About Credo Technology Group

Credo Technology Group Holding Ltd provides various high-speed connectivity Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.