Arteris (NASDAQ:AIP) & Advantest (OTCMKTS:ATEYY) Critical Analysis

Arteris (NASDAQ:AIP) and Advantest (OTCMKTS:ATEYY) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

64.4% of Arteris shares are owned by institutional investors. Comparatively, 0.0% of Advantest shares are owned by institutional investors. 33.7% of Arteris shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Arteris and Advantest”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arteris	$53.30 million	5.11	-$36.87 million	($1.03)	-6.87
Advantest	$3.37 billion	9.77	$429.80 million	$0.58	76.88

Advantest has higher revenue and earnings than Arteris. Arteris is trading at a lower price-to-earnings ratio than Advantest, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Arteris and Advantest, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arteris	0	1	3	0	2.75
Advantest	0	0	0	0	N/A

Arteris presently has a consensus target price of $13.00, suggesting a potential upside of 83.62%. Given Arteris’ higher probable upside, research analysts plainly believe Arteris is more favorable than Advantest.

Profitability

This table compares Arteris and Advantest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arteris	-68.37%	-274.66%	-35.43%
Advantest	14.65%	18.20%	11.61%

Risk & Volatility

Arteris has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Advantest has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Summary

Advantest beats Arteris on 9 of the 13 factors compared between the two stocks.

About Arteris

Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.

About Advantest

Advantest Corporation manufactures and sells semiconductors, component test system products, and mechatronics related products in Japan, the Americas, Europe, and Asia. The company operates through three segments: Semiconductor and Component Test System; Mechatronics Related Business; and Services, Support and Others. The Semiconductor and Component Test System segment provides customers with test system products for the semiconductor industry and the electronic parts industry, as well as offers test systems for SoC semiconductor devices, and test systems for memory semiconductors devices. The Mechatronics Related Business segment provides test handlers; mechatronic-applied products for handling semiconductor devices; and device interfaces, which serve as interfaces with the devices that are measured, as well as nano-technology related products. The Services, Support and Others segment provides test solutions of system level testing customer solutions for the semiconductor and modules, and support services. This segment is also involved in the sale of consumables and used products, and equipment lease and other businesses. It also engages in the research and development activities and provides maintenance and support services. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.