SMART Global (NASDAQ:SGH – Get Rating) and Transphorm (OTCMKTS:TGAN – Get Rating) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Analyst Ratings
This is a summary of recent recommendations for SMART Global and Transphorm, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SMART Global | 0 | 0 | 6 | 0 | 3.00 |
| Transphorm | 0 | 0 | 2 | 0 | 3.00 |
SMART Global presently has a consensus price target of $43.00, suggesting a potential upside of 77.69%. Transphorm has a consensus price target of $10.00, suggesting a potential upside of 43.88%. Given SMART Global’s higher probable upside, equities research analysts clearly believe SMART Global is more favorable than Transphorm.
Institutional and Insider Ownership
52.6% of SMART Global shares are owned by institutional investors. 2.6% of SMART Global shares are owned by company insiders. Comparatively, 3.0% of Transphorm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk and Volatility
SMART Global has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Transphorm has a beta of -1.24, indicating that its stock price is 224% less volatile than the S&P 500.
Earnings and Valuation
This table compares SMART Global and Transphorm’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SMART Global | $1.50 billion | 0.80 | $21.31 million | $0.64 | 37.52 |
| Transphorm | $24.05 million | 15.42 | -$10.23 million | ($0.20) | -34.75 |
SMART Global has higher revenue and earnings than Transphorm. Transphorm is trading at a lower price-to-earnings ratio than SMART Global, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares SMART Global and Transphorm’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SMART Global | 1.97% | 49.59% | 11.86% |
| Transphorm | -42.56% | N/A | -38.06% |
Summary
SMART Global beats Transphorm on 11 of the 13 factors compared between the two stocks.
SMART Global Company Profile (Get Rating)
SMART Global Holdings, Inc. designs and manufactures specialty solutions for the computing, memory, and LED markets in the United states, Brazil, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platforms Solutions, and LED Solutions segments. The company offers dynamic random access memory modules for desktops, notebooks, servers, and smartphones; embedded and removable flash memory products; and flash component products. It also provides supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging. In addition, the company offers Penguin Computing solutions to customers in financial services, energy, government, social media, and education end markets; Penguin Edge solutions to government, telecommunications, health care, smart city, network edge, and industrial applications; and hardware and software products, including solutions based on the Open Compute Project. Further, it provides servers, software, integrated turn-key clusters, enterprise-grade storage, and networking in hardware or cloud-based solutions through Penguin-On-Demand; Open Compute Tundra Extreme Scale products; turn-key storage solutions; and rackmount servers and GPU accelerated computing platforms. Additionally, the company’s LED Solutions offers application-optimized LEDs for lighting, video screens, and specialty lighting applications under the CreeLED brand. It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. The company was formerly known as Saleen Holdings, Inc. and changed its name to SMART Global Holdings, Inc. in August 2014. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Newark, California.
Transphorm Company Profile (Get Rating)
Transphorm, Inc. develops, manufactures, and sells gallium nitride (GaN) semiconductor components used in power conversion in Mainland China, Hong Kong, Taiwan, the United States, Japan, South Korea, and Europe. Its GaN devices allows customers to design smaller, lighter, and cooler power systems creating increased functional value in end products, including smartphone power adapters/fast-chargers, power supplies for datacenter servers/communication, industrial power converters, and chargers/converters/inverters for electric vehicles. The company offers its products through sales representatives and distributors. Transphorm, Inc. headquartered in Goleta, California.
Want More Great Investing Ideas?
- 3 Stocks to DOUBLE This Year
- The 10 Best Stocks to Own in 2022
- 7 Stocks to Buy and Hold Forever
- 9 “MUST OWN” Growth Stocks
Receive News & Ratings for SMART Global Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for SMART Global and related companies with MarketBeat.com’s FREE daily email newsletter.