ARM (NASDAQ:ARM) & Infineon Technologies (OTCMKTS:IFNNY) Financial Analysis

Infineon Technologies (OTCMKTS:IFNNY) and ARM (NASDAQ:ARM) are both large-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Infineon Technologies and ARM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Infineon Technologies	0	1	0	1	3.00
ARM	1	8	16	0	2.60

ARM has a consensus target price of $160.81, suggesting a potential upside of 26.08%. Given ARM’s higher possible upside, analysts plainly believe ARM is more favorable than Infineon Technologies.

Valuation & Earnings

This table compares Infineon Technologies and ARM”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Infineon Technologies	$16.21 billion	4.07	$1.12 billion	$0.93	57.80
ARM	$4.01 billion	33.63	$792.00 million	$0.75	170.05

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

Profitability

This table compares Infineon Technologies and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Infineon Technologies	7.51%	11.37%	6.61%
ARM	17.15%	14.01%	10.65%

Volatility & Risk

Infineon Technologies has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, ARM has a beta of 4.35, suggesting that its stock price is 335% more volatile than the S&P 500.

Institutional and Insider Ownership

0.2% of Infineon Technologies shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

ARM beats Infineon Technologies on 9 of the 14 factors compared between the two stocks.

About Infineon Technologies

Infineon Technologies AG designs, develops, manufactures, and markets semiconductors and semiconductor-based solutions worldwide. Its Automotive segment offers automotive microcontrollers; 3D ToF, magnetic, and pressure sensors; discrete power semiconductors; IGBT modules; industrial microcontrollers; power and memory ICs; transceivers; diodes, MOSEFTs, and modules; and voltage regulators for use in assistance and safety systems, comfort electronics, infotainment, powertrain, and security products. The company’s Green Industrial Power segment provides bare dies, discrete IGBTs, and driver ICs; SiC diodes, MOSFETs, and modules; and IGBT modules for home appliances, industrial drives, industrial power supplies, industrial robotics, industrial vehicles, and traction, as well as for energy generation, storage, and transmission. Its Power & Sensor Systems segment offers chips for gas and pressure sensors, and MEMS microphones; 3D ToF sensors; control ICs; discrete low-, mid-, and high-voltage power MOSFET; customized chips; GaN power switches; GPS low-noise amplifiers; low-voltage and high-voltage driver ICs; radar sensor ICs; RF antenna switches and power transistors; transient voltage suppressor diodes; SiC diode and MOSFETs; and USB controllers for use in audio amplifiers, automotive electronics, BLDC motors, cellular communications infrastructure, electric vehicle charging stations, human machine interaction, IoT, LED and conventional lighting systems, microinverter, mobile devices, power management, and special applications. The company’s Connected Secure Systems segment provides connectivity solutions, embedded security controllers, microcontrollers, and security controllers for authentication, automotive, consumer electronics, government identification document, IoT, mobile communication, payment system, ticketing, access control, and computing applications. Infineon Technologies AG was founded in 1999 and is headquartered in Neubiberg, Germany.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.