Analyzing Synaptics (SYNA) & Smart Global (SGH)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Synaptics 1.39% 15.21% 7.28%
Smart Global 7.49% 61.87% 18.20%



Earnings and Valuation

This table compares Synaptics and Smart Global’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synaptics $1.63 billion 0.69 -$124.10 million $1.98 16.38
Smart Global $1.29 billion 0.36 $119.46 million $6.00 3.36

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

Institutional & Insider Ownership

98.6% of Synaptics shares are held by institutional investors. Comparatively, 99.7% of Smart Global shares are held by institutional investors. 2.7% of Synaptics shares are held by company insiders. Comparatively, 4.2% of Smart Global shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Synaptics and Smart Global, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synaptics 0 6 3 0 2.33
Smart Global 0 1 4 0 2.80

Synaptics currently has a consensus price target of $44.11, suggesting a potential upside of 36.02%. Smart Global has a consensus price target of $41.60, suggesting a potential upside of 106.14%. Given Smart Global’s stronger consensus rating and higher probable upside, analysts plainly believe Smart Global is more favorable than Synaptics.

Volatility & Risk

Synaptics has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Smart Global has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500.

Summary

Smart Global beats Synaptics on 10 of the 14 factors compared between the two stocks.

About Synaptics

Synaptics Incorporated develops, markets, and sells intuitive human interface solutions for electronic devices and products worldwide. The company offers its products and solutions for smartphones, tablets, and touchscreen applications, as well as mobile, handheld, wireless, and entertainment devices; notebook applications; and other personal computer (PC) product applications. Its products include ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for entry-level smartphones; TouchView products, which integrate touch and display technologies to deliver performance and simplified design; and Natural ID, a fingerprint ID product that is used in smartphones, tablets, notebook PCs, PC peripherals, and other applications. The company also provides TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design to the TouchPad solution; ForcePad, a thinner version of its ClickPad; AudioSmart personal voice and audio solutions; VideoSmart single-chip 4K UHD media processors for TVs, set-top boxes, and over-the-top streaming devices; and ImagingSmart solutions. In addition, it offers TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; and TouchButtons, which provides capacitive buttons and scrolling controls, as well as display interface products. The company sells its products through direct sales, outside sales representatives, distributors, and resellers. It serves smartphone, tablet, and PC original equipment manufacturers; and consumer electronics manufacturers. The company was founded in 1986 and is headquartered in San Jose, California.

About Smart Global

SMART Global Holdings, Inc. designs, manufactures, and supplies specialty memory solutions worldwide. The company offers dynamic random access memory (DRAM) components, which are used to manufacture modules and other products; DRAM modules for desktop, notebook, and server applications, as well as for use in smartphones; and specialty DRAM modules for industrial, communications, and networking applications, as well as develops specialized memory module designs based on original equipment manufacturer (OEM) requirements. It also provides flash memory, USB, and serial advanced technology attachment products primarily for use in communications equipment, printers, servers and storage products, switches, and routers; and aerospace, automotive, and defense industries, as well as industrial applications. In addition, the company provides networking, storage, and compute solutions, as well as HPC software to manage and use on premise and cloud computing clusters. Further, it offers supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. SMART Global Holdings, Inc. sells its products to OEMs through direct sales force and independent sales representatives in North America, Latin America, Asia, and Europe. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.

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