Comparing Smart Global (SGH) & Pixelworks (PXLW)

Smart Global (NASDAQ: SGH) and Pixelworks (NASDAQ:PXLW) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Analyst Recommendations

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This is a summary of recent recommendations for Smart Global and Pixelworks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smart Global 0 1 6 0 2.86
Pixelworks 0 0 3 0 3.00

Smart Global presently has a consensus target price of $49.64, indicating a potential upside of 10.34%. Pixelworks has a consensus target price of $7.00, indicating a potential upside of 59.45%. Given Pixelworks’ stronger consensus rating and higher possible upside, analysts clearly believe Pixelworks is more favorable than Smart Global.

Institutional and Insider Ownership

85.7% of Smart Global shares are held by institutional investors. Comparatively, 38.2% of Pixelworks shares are held by institutional investors. 6.9% of Smart Global shares are held by insiders. Comparatively, 4.5% of Pixelworks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Smart Global and Pixelworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Smart Global 5.50% 100.66% 17.45%
Pixelworks -5.18% 11.87% 6.83%

Valuation & Earnings

This table compares Smart Global and Pixelworks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Smart Global $132.88 million 7.49 -$7.79 million $2.04 22.05
Pixelworks $80.64 million 1.94 -$4.17 million $0.10 43.90

Pixelworks has lower revenue, but higher earnings than Smart Global. Smart Global is trading at a lower price-to-earnings ratio than Pixelworks, indicating that it is currently the more affordable of the two stocks.

Summary

Smart Global beats Pixelworks on 9 of the 13 factors compared between the two stocks.

Smart Global Company Profile

Smart Global Holdings Inc. is a holding company. The Company through its subsidiaries provides specialty memory solutions. The Company manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The Company also serves original equipment manufacturer (OEM), customers to develop memory solutions. The Company also provides customized, integrated supply chain services to certain OEM customers to assist them in the management and execution of their procurement processes. The Company offers its products and services under a range of categories including dynamic random-access memory (DRAM) components, DRAM modules, flash components, mobile memory and supply chain services. The Company offers a range of DRAM modules including DIMMs, nonvolatile DIMMs, load reducing DIMMs, registered DIMMs, unbuffered DIMMs, small outline DIMMs, and mini-DIMMs.

Pixelworks Company Profile

Pixelworks, Inc. designs, develops and markets video and pixel processing semiconductors, intellectual property cores, software and custom application specific integrated circuit (ASIC) solutions for digital video applications. The Company is engaged in the design and development of integrated circuits (ICs) for use in electronic display devices. It provides its customers with software development tools and with software that provides basic functionality for its ICs and enables connectivity of its customers’ products. Its primary target markets include digital projection systems, Ultrabook devices, tablets and smartphones. Its video display processing technologies include Halo Free Motion Estimation and Motion Compensation (MEMC), Advanced Scaling, Mobile Video Display Processing, and Vuemagic and Networked Displays. Its primary video display processor product categories include ImageProcessor ICs, Video Co-Processor ICs and Networked Display ICs.

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