Critical Analysis: PDF Solutions (PDFS) & Its Peers

PDF Solutions (NASDAQ:PDFS) is one of 221 public companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it contrast to its peers? We will compare PDF Solutions to related companies based on the strength of its risk, dividends, earnings, valuation, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares PDF Solutions and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PDF Solutions	4.27%	7.21%	4.83%
PDF Solutions Competitors	-1,278.97%	-126.38%	-4.00%

Risk and Volatility

PDF Solutions has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, PDF Solutions’ peers have a beta of 2.80, suggesting that their average stock price is 180% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for PDF Solutions and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PDF Solutions	0	3	6	0	2.67
PDF Solutions Competitors	3496	12336	25747	993	2.57

PDF Solutions presently has a consensus price target of $61.33, indicating a potential upside of 77.67%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 61.19%. Given PDF Solutions’ stronger consensus rating and higher probable upside, research analysts plainly believe PDF Solutions is more favorable than its peers.

Insider & Institutional Ownership

79.5% of PDF Solutions shares are owned by institutional investors. Comparatively, 54.6% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by institutional investors. 11.1% of PDF Solutions shares are owned by company insiders. Comparatively, 11.9% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares PDF Solutions and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
PDF Solutions	$219.02 million	-$640,000.00	138.08
PDF Solutions Competitors	$9.83 billion	$2.48 billion	8.27

PDF Solutions’ peers have higher revenue and earnings than PDF Solutions. PDF Solutions is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

PDF Solutions beats its peers on 8 of the 13 factors compared.

About PDF Solutions

PDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that store collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offer data collection and analysis capabilities; and Assembly Operations that provide device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides Design-For-Inspection (DFI) systems, such as DFI On-Chip Instruments; eProbe Non-Contact E-Beam Tool; and Characterization Vehicle (CV) system, which includes CV Test Chips and pdFasTest Electrical Testers, as well as Exensio characterization software, designed to analyze the measurements collected using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. PDF Solutions, Inc. was founded in 1991 and is headquartered in Santa Clara, California.