Critical Analysis: Netlist (OTCMKTS:NLST) versus Valens Semiconductor (NYSE:VLN)

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

Valuation and Earnings

This table compares Netlist and Valens Semiconductor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$69.21 million	3.33	-$60.40 million	($0.25)	-3.61
Valens Semiconductor	$61.26 million	3.25	-$19.66 million	($0.24)	-7.96

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Netlist	-50.76%	-356.11%	-95.47%
Valens Semiconductor	-46.71%	-17.06%	-15.35%

Analyst Ratings

This is a summary of recent ratings and target prices for Netlist and Valens Semiconductor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netlist	0	0	0	0	N/A
Valens Semiconductor	0	0	1	0	3.00

Valens Semiconductor has a consensus price target of $4.00, indicating a potential upside of 109.42%. Given Valens Semiconductor’s higher possible upside, analysts plainly believe Valens Semiconductor is more favorable than Netlist.

Volatility and Risk

Netlist has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Netlist shares are owned by institutional investors. Comparatively, 33.9% of Valens Semiconductor shares are owned by institutional investors. 2.7% of Netlist shares are owned by company insiders. Comparatively, 58.9% of Valens Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Valens Semiconductor beats Netlist on 9 of the 13 factors compared between the two stocks.

About Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

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.