Head-To-Head Comparison: Valens Semiconductor (NYSE:VLN) vs. ARM (NASDAQ:ARM)

Valens Semiconductor (NYSE:VLN) and ARM (NASDAQ:ARM) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

Valens Semiconductor has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, ARM has a beta of 4.53, meaning that its stock price is 353% more volatile than the S&P 500.

Profitability

This table compares Valens Semiconductor and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valens Semiconductor	-41.94%	-14.05%	-12.51%
ARM	18.13%	13.69%	9.70%

Institutional and Insider Ownership

33.9% of Valens Semiconductor shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 58.9% of Valens Semiconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Valens Semiconductor and ARM”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valens Semiconductor	$63.13 million	5.27	-$19.66 million	($0.25)	-12.52
ARM	$3.54 billion	43.04	$306.00 million	$0.60	242.00

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Valens Semiconductor and ARM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valens Semiconductor	0	0	1	1	3.50
ARM	2	6	18	1	2.67

Valens Semiconductor presently has a consensus price target of $4.00, suggesting a potential upside of 27.80%. ARM has a consensus price target of $150.32, suggesting a potential upside of 3.52%. Given Valens Semiconductor’s stronger consensus rating and higher probable upside, equities analysts clearly believe Valens Semiconductor is more favorable than ARM.

Summary

ARM beats Valens Semiconductor on 10 of the 14 factors compared between the two stocks.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.