Critical Analysis: Microsemi Communications (VTSS) and The Competition

Microsemi Communications (NASDAQ: VTSS) is one of 26 publicly-traded companies in the “Integrated Circuits” industry, but how does it compare to its peers? We will compare Microsemi Communications to related companies based on the strength of its earnings, risk, profitability, institutional ownership, dividends, valuation and analyst recommendations.

Volatility & Risk

Microsemi Communications has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500. Comparatively, Microsemi Communications’ peers have a beta of 0.90, indicating that their average share price is 10% less volatile than the S&P 500.

Insider & Institutional Ownership

56.1% of shares of all “Integrated Circuits” companies are owned by institutional investors. 14.3% of shares of all “Integrated Circuits” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Microsemi Communications N/A N/A -18.86
Microsemi Communications Competitors $744.39 million $106.85 million 504.48

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Microsemi Communications and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsemi Communications 0 0 0 0 N/A
Microsemi Communications Competitors 78 451 990 60 2.65

As a group, “Integrated Circuits” companies have a potential upside of 6.01%. Given Microsemi Communications’ peers higher probable upside, analysts plainly believe Microsemi Communications has less favorable growth aspects than its peers.

Profitability

This table compares Microsemi Communications and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microsemi Communications -20.36% -69.40% -23.46%
Microsemi Communications Competitors -1.85% -9.66% -2.87%

Summary

Microsemi Communications peers beat Microsemi Communications on 7 of the 8 factors compared.

Microsemi Communications Company Profile

Vitesse Semiconductor Corporation supplies high-performance integrated circuits used by manufacturers of networking systems for Carrier and Enterprise networking applications. The Company designs, develops and markets a diverse networking and connectivity IC solutions. The Company develops and manufactures variety of products that are marketed to Carrier and Enterprise networking, as well as data center infrastructure original equipment manufacturers. The Company’s product lines include Ethernet Switching Product Line that addresses Gigabit Ethernet and 10 Gigabit Ethernet applications in Carrier and Enterprise markets; Connectivity Product Line includes mixed-signal physical layer devices for connection of systems via optical fiber, copper cable, or backplanes and Transport Processing Product Line addresses the needs of Carrier network providers as they undergo a migration to new Ethernet packet-based networks.

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