BlackLine (NASDAQ:BL) vs. Arteris (NASDAQ:AIP) Financial Analysis

BlackLine (NASDAQ:BL) and Arteris (NASDAQ:AIP) are both small-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Valuation and Earnings

This table compares BlackLine and Arteris”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackLine	$700.43 million	2.77	$24.17 million	$0.57	58.49
Arteris	$70.58 million	12.97	-$34.75 million	($0.87)	-21.41

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

Institutional and Insider Ownership

95.1% of BlackLine shares are held by institutional investors. Comparatively, 64.4% of Arteris shares are held by institutional investors. 9.1% of BlackLine shares are held by insiders. Comparatively, 23.3% of Arteris shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for BlackLine and Arteris, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackLine	3	6	5	0	2.14
Arteris	1	0	6	0	2.71

BlackLine currently has a consensus price target of $39.50, indicating a potential upside of 18.48%. Arteris has a consensus price target of $37.29, indicating a potential upside of 100.14%. Given Arteris’ stronger consensus rating and higher possible upside, analysts plainly believe Arteris is more favorable than BlackLine.

Volatility & Risk

BlackLine has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Arteris has a beta of 1.93, suggesting that its stock price is 93% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BlackLine	4.75%	20.89%	4.19%
Arteris	-46.70%	-295.96%	-22.26%

Summary

BlackLine beats Arteris on 8 of the 14 factors compared between the two stocks.

About BlackLine

BlackLine, Inc. operates a cloud-based software platform which is designed to transform accounting and finance operations for organizations of all types and sizes. Its scalable platform supports critical accounting processes such as the financial close, account reconciliations, intercompany accounting, and controls assurance. The company was founded by Therese Tucker in May 2001 and is headquartered in Woodland Hills, CA.

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.