GCT Semiconductor (NYSE:GCTS) versus Applied Materials (NASDAQ:AMAT) Critical Comparison

Applied Materials (NASDAQ:AMAT) and GCT Semiconductor (NYSE:GCTS) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Institutional and Insider Ownership

80.6% of Applied Materials shares are owned by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are owned by institutional investors. 0.3% of Applied Materials shares are owned by company insiders. Comparatively, 0.2% of GCT Semiconductor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Applied Materials and GCT Semiconductor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Materials	1	6	15	0	2.64
GCT Semiconductor	0	0	1	0	3.00

Applied Materials presently has a consensus price target of $220.29, indicating a potential upside of 34.43%. GCT Semiconductor has a consensus price target of $8.00, indicating a potential upside of 253.98%. Given GCT Semiconductor’s stronger consensus rating and higher possible upside, analysts clearly believe GCT Semiconductor is more favorable than Applied Materials.

Valuation & Earnings

This table compares Applied Materials and GCT Semiconductor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Materials	$27.18 billion	4.91	$7.18 billion	$8.61	19.03
GCT Semiconductor	$16.03 million	6.73	-$2.00 million	N/A	N/A

Applied Materials has higher revenue and earnings than GCT Semiconductor.

Volatility and Risk

Applied Materials has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Profitability

This table compares Applied Materials and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Materials	26.41%	39.26%	21.92%
GCT Semiconductor	N/A	N/A	-27.81%

Summary

Applied Materials beats GCT Semiconductor on 9 of the 12 factors compared between the two stocks.

About Applied Materials

Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.