Critical Comparison: Synaptics (NASDAQ:SYNA) vs. SiTime (NASDAQ:SITM)

Synaptics (NASDAQ:SYNA) and SiTime (NASDAQ:SITM) are both mid-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Valuation & Earnings

This table compares Synaptics and SiTime”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synaptics	$979.40 million	3.28	$125.60 million	$3.95	20.28
SiTime	$143.99 million	34.03	-$80.54 million	($4.14)	-50.67

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

Insider and Institutional Ownership

99.4% of Synaptics shares are owned by institutional investors. Comparatively, 84.3% of SiTime shares are owned by institutional investors. 1.3% of Synaptics shares are owned by company insiders. Comparatively, 2.3% of SiTime shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Synaptics has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, SiTime has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synaptics	16.14%	1.30%	0.65%
SiTime	-53.55%	-9.89%	-7.56%

Analyst Ratings

This is a breakdown of recent ratings for Synaptics and SiTime, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synaptics	0	3	6	0	2.67
SiTime	1	0	3	0	2.50

Synaptics currently has a consensus price target of $97.33, suggesting a potential upside of 21.50%. SiTime has a consensus price target of $196.25, suggesting a potential downside of 6.44%. Given Synaptics’ stronger consensus rating and higher possible upside, research analysts plainly believe Synaptics is more favorable than SiTime.

Summary

Synaptics beats SiTime on 11 of the 14 factors compared between the two stocks.

About Synaptics

Synaptics Incorporated develops, markets, and sells semiconductor products worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes, over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in notebook personal computers (PCs), PC peripherals, automobiles, and other applications; 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; and ForcePad. In addition, the company offers 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 displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides 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; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

About SiTime

SiTime Corporation designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.