Allegro MicroSystems (NASDAQ:ALGM – Get Free Report) and Credo Technology Group (NASDAQ:CRDO – Get Free Report) are both mid-cap computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.
Valuation & Earnings
This table compares Allegro MicroSystems and Credo Technology Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Allegro MicroSystems | $937.99 million | 4.92 | $152.70 million | $0.78 | 30.54 |
| Credo Technology Group | $217.59 million | 31.66 | -$28.37 million | ($0.18) | -231.67 |
Allegro MicroSystems has higher revenue and earnings than Credo Technology Group. Credo Technology Group is trading at a lower price-to-earnings ratio than Allegro MicroSystems, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Allegro MicroSystems | 0 | 0 | 8 | 0 | 3.00 |
| Credo Technology Group | 1 | 0 | 7 | 1 | 2.89 |
Allegro MicroSystems presently has a consensus price target of $33.38, suggesting a potential upside of 40.11%. Credo Technology Group has a consensus price target of $36.56, suggesting a potential downside of 12.34%. Given Allegro MicroSystems’ stronger consensus rating and higher possible upside, research analysts plainly believe Allegro MicroSystems is more favorable than Credo Technology Group.
Profitability
This table compares Allegro MicroSystems and Credo Technology Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Allegro MicroSystems | 7.91% | 13.88% | 10.65% |
| Credo Technology Group | -12.05% | -3.74% | -3.30% |
Institutional and Insider Ownership
56.5% of Allegro MicroSystems shares are held by institutional investors. Comparatively, 80.5% of Credo Technology Group shares are held by institutional investors. 0.5% of Allegro MicroSystems shares are held by insiders. Comparatively, 23.9% of Credo Technology Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Allegro MicroSystems has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, Credo Technology Group has a beta of 2.24, meaning that its stock price is 124% more volatile than the S&P 500.
Summary
Allegro MicroSystems beats Credo Technology Group on 10 of the 15 factors compared between the two stocks.
About Allegro MicroSystems
Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
About Credo Technology Group
Credo Technology Group Holding Ltd provides various high-speed connectivity Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.
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