Ambarella (NASDAQ:AMBA) vs. Skyworks Solutions (NASDAQ:SWKS) Head-To-Head Analysis

Ambarella (NASDAQ:AMBA) and Skyworks Solutions (NASDAQ:SWKS) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Profitability

This table compares Ambarella and Skyworks Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ambarella	-62.38%	-23.52%	-19.93%
Skyworks Solutions	13.02%	12.60%	9.67%

Earnings and Valuation

This table compares Ambarella and Skyworks Solutions”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambarella	$284.87 million	7.41	-$169.42 million	($2.84)	-17.82
Skyworks Solutions	$4.05 billion	2.55	$596.00 million	$3.26	19.67

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

Risk and Volatility

Ambarella has a beta of 1.78, suggesting that its share price is 78% more volatile than the S&P 500. Comparatively, Skyworks Solutions has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Institutional & Insider Ownership

82.1% of Ambarella shares are owned by institutional investors. Comparatively, 85.4% of Skyworks Solutions shares are owned by institutional investors. 5.7% of Ambarella shares are owned by insiders. Comparatively, 0.3% of Skyworks Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Ambarella and Skyworks Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambarella	0	4	8	0	2.67
Skyworks Solutions	3	19	1	0	1.91

Ambarella presently has a consensus target price of $86.67, indicating a potential upside of 71.24%. Skyworks Solutions has a consensus target price of $83.78, indicating a potential upside of 30.66%. Given Ambarella’s stronger consensus rating and higher possible upside, analysts plainly believe Ambarella is more favorable than Skyworks Solutions.

Summary

Skyworks Solutions beats Ambarella on 8 of the 14 factors compared between the two stocks.

About Ambarella

Ambarella, Inc. develops semiconductor solutions that enable high-definition (HD) and ultra HD compression, image signal processing, and artificial intelligence processing worldwide. The company's system-on-a-chip designs integrated HD video processing, image processing, artificial intelligence computer vision algorithms, audio processing, and system functions onto a single chip for delivering video and image quality, differentiated functionality, and low power consumption. Its solutions are used in automotive cameras, such as automotive video recorders, electronic mirrors, front advanced driver assistance system camera, cabin monitoring system and driver monitoring system camera, and central domain controllers for autonomous vehicle; enterprise and public class, and home security camera; and robotics and industrial application, including identification/authentication cameras, robotic products, and sensing cameras, as well as cameras for the enterprise, home, public spaces, and consumer leisure comprising wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing, and virtual reality applications. The company sells its solutions to original design manufacturers and original equipment manufacturers through its direct sales force and distributors. Ambarella, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

About Skyworks Solutions

Skyworks Solutions, Inc., together with its subsidiaries, designs, develops, manufactures, and markets proprietary semiconductor products in the United States, China, South Korea, Taiwan, Europe, the Middle East, Africa, and the rest of Asia-Pacific. Its product portfolio includes amplifiers, antenna tuners, attenuators, automotive tuners and digital radios, DC/DC converters, demodulators, detectors, diodes, wireless analog system on chip products, directional couplers, diversity receive modules, filters, front-end modules, hybrids, light emitting diode drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase locked loops, phase shifters, power dividers/combiners, power over ethernet, power isolators, receivers, switches, synthesizers, timing devices, voltage controlled oscillators/synthesizers, and voltage regulators. The company products are the used in aerospace, automotive, broadband, cellular infrastructure, connected home, defense, entertainment and gaming, industrial, medical, military, smartphone, tablet, and wearable markets. It sells its products through direct sales force, electronic component distributors, and independent sales representatives. Skyworks Solutions, Inc. was founded in 1962 and is based in Irvine, California.