Contrasting Cavium (CAVM) & Solaredge Technologies (SEDG)

Cavium (NASDAQ:CAVM) and Solaredge Technologies (NASDAQ:SEDG) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Institutional & Insider Ownership

85.8% of Cavium shares are held by institutional investors. Comparatively, 79.8% of Solaredge Technologies shares are held by institutional investors. 4.7% of Cavium shares are held by company insiders. Comparatively, 9.7% of Solaredge Technologies shares are held by company 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.

Earnings & Valuation

This table compares Cavium and Solaredge Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cavium N/A N/A N/A N/A N/A
Solaredge Technologies $607.04 million 2.97 $84.17 million $2.25 17.53

Solaredge Technologies has higher revenue and earnings than Cavium.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cavium and Solaredge Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cavium 0 2 0 0 2.00
Solaredge Technologies 1 2 9 0 2.67

Cavium currently has a consensus target price of $80.50, suggesting a potential upside of ∞. Solaredge Technologies has a consensus target price of $54.27, suggesting a potential upside of 37.40%. Given Cavium’s higher possible upside, analysts plainly believe Cavium is more favorable than Solaredge Technologies.

Profitability

This table compares Cavium and Solaredge Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cavium N/A N/A N/A
Solaredge Technologies 15.69% 33.12% 20.50%

Summary

Solaredge Technologies beats Cavium on 7 of the 9 factors compared between the two stocks.

About Cavium

Cavium, Inc. designs, develops, and markets semiconductor processors for intelligent and secure networks in the United States and internationally. The company offers integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage, and security applications. Its products consist of multi-core processors for embedded and data center applications, network connectivity for server and switches, storage connectivity, and security processors for offload and appliance, as well as a suite of embedded security protocols that enable unified threat management, secure connectivity, network perimeter protection, and deep packet inspection. The company sells software subscriptions of embedded Linux operating system, related development tools, application software stacks, and support and professional services. It offers its products under the OCTEON, OCTEON Fusion-M, OCTEON XL, OCTEON TX, LiquidIO, LiquidSecurity, NITROX, ThunderX, ThunderX2, Xpliant, and XPA, as well as QLogic and FastLinQ names. Cavium, Inc. primarily sells its products to original equipment manufacturers and mega data centers directly or through their contract manufacturers, as well as through channels and original design manufacturers. The company was founded in 2000 and is headquartered in San Jose, California.

About Solaredge Technologies

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in Israel, the United States, the Netherlands, Europe, and internationally. The company's DC optimized inverter systems include power optimizers and inverters, as well as a cloud-based monitoring platform. Its products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. The company sells its products directly to solar installers, as well as engineering, procurement, and construction firms; and indirectly to solar installers through distributors and electrical equipment wholesalers, as well as PV module manufacturers. SolarEdge Technologies, Inc. was founded in 2006 and is headquartered in Herzliya, Israel.

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