Financial Comparison: GSI Technology (NASDAQ:GSIT) vs. Pixelworks (NASDAQ:PXLW)

GSI Technology (NASDAQ:GSIT) and Pixelworks (NASDAQ:PXLW) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Profitability

This table compares GSI Technology and Pixelworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GSI Technology	-92.29%	-47.40%	-39.94%
Pixelworks	-33.22%	-55.94%	-22.24%

Volatility and Risk

GSI Technology has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.

Earnings & Valuation

This table compares GSI Technology and Pixelworks’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GSI Technology	$21.76 million	3.10	-$20.09 million	($0.80)	-3.31
Pixelworks	$59.68 million	0.95	-$26.18 million	($0.39)	-2.52

GSI Technology has higher earnings, but lower revenue than Pixelworks. GSI Technology is trading at a lower price-to-earnings ratio than Pixelworks, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for GSI Technology and Pixelworks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GSI Technology	0	0	0	0	N/A
Pixelworks	0	0	3	0	3.00

Pixelworks has a consensus target price of $2.50, indicating a potential upside of 154.27%. Given Pixelworks’ higher possible upside, analysts plainly believe Pixelworks is more favorable than GSI Technology.

Insider & Institutional Ownership

33.2% of GSI Technology shares are held by institutional investors. Comparatively, 21.4% of Pixelworks shares are held by institutional investors. 32.1% of GSI Technology shares are held by company insiders. Comparatively, 4.7% of Pixelworks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Pixelworks beats GSI Technology on 8 of the 13 factors compared between the two stocks.

About GSI Technology

GSI Technology, Inc. designs, develops, and markets semiconductor memory solutions to networking, industrial, medical, aerospace, and military customers in the United States, China, Singapore, Germany, the Netherlands, and internationally. It offers associative processing unit products, which are focuses on applications using similarity search in visual search queries for ecommerce, computer vision, drug discovery, cyber security, and service markets. The company also provides static random access memory (SRAM) products, such as SyncBurst for microprocessor cache and other applications; No Bus Turnaround SRAMs to address the needs of networking and telecom applications; SigmaQuad and SigmaDDR products for density and random transaction rate requirements of networking and telecom applications; Low Latency DRAMs, a solution for advanced data networking applications; Asynchronous, a main memory for small cache-less embedded processors for industrial electronics, measurement systems and cost-sensitive networking equipment, and other applications; and specialty SRAMs. In addition, it offers radiation-hardened and radiation-tolerant SRAMs for military/defense and aerospace applications, such as networking satellites and missiles. The company's products are used as components in its original equipment manufacturer customers' products, including routers, switches, and other networking and telecommunications products; military and aerospace applications, such as radar and guidance systems and satellites; test and measurement applications consisting of high-speed testers; automotive applications comprising smart cruise control; medical applications, including ultrasound and CAT scan equipment; and audio/video processing. It markets its products through a network of independent sales representatives and distributors. GSI Technology, Inc. was incorporated in 1995 and is headquartered in Sunnyvale, California.

About Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.