Critical Survey: Synaptics (NASDAQ:SYNA) versus SolarEdge Technologies (NASDAQ:SEDG)

Synaptics (NASDAQ:SYNA) and SolarEdge Technologies (NASDAQ:SEDG) 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, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Profitability

This table compares Synaptics and SolarEdge Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synaptics	16.73%	1.61%	0.84%
SolarEdge Technologies	-192.13%	-95.05%	-41.78%

Insider & Institutional Ownership

99.4% of Synaptics shares are owned by institutional investors. Comparatively, 95.1% of SolarEdge Technologies shares are owned by institutional investors. 1.3% of Synaptics shares are owned by insiders. Comparatively, 0.7% of SolarEdge Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Synaptics has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, SolarEdge Technologies has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Synaptics and SolarEdge Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synaptics	0	2	5	1	2.88
SolarEdge Technologies	9	16	3	1	1.86

Synaptics currently has a consensus target price of $96.88, indicating a potential upside of 54.21%. SolarEdge Technologies has a consensus target price of $21.65, indicating a potential upside of 34.31%. Given Synaptics’ stronger consensus rating and higher possible upside, research analysts plainly believe Synaptics is more favorable than SolarEdge Technologies.

Valuation and Earnings

This table compares Synaptics and SolarEdge Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synaptics	$1.01 billion	2.44	$125.60 million	$4.23	14.85
SolarEdge Technologies	$901.46 million	1.05	$34.33 million	($31.19)	-0.52

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

Summary

Synaptics beats SolarEdge Technologies on 13 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 SolarEdge Technologies

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. It operates in two segments, Solar and Energy Storage. The Solar segment offers power optimizers, inverters, batteries, storage solutions, electric vehicle chargers, smart tracking solutions, and smart energy management software products; Monitoring platform, a cloud-based monitoring platform, which collects power, voltage, current, and system data sent from inverters and power optimizers; and MySolarEdge app, that enables system owners to track their real-time system production and household energy consumption. This segment also provides Designer platform, an web-based tool that helps solar professionals to plan, build, and validate residential and commercial systems; Mapper application for registering the physical layout of new PV sites installed with DC optimized inverter systems; SetApp application that activates and configurate inverters; and grid services. The Energy Storage segment provides lithium-ion cells and containerized battery systems (BESS) solutions for commercial, industrial, and utility markets; modules and racks; purpose-built components and solutions, and hardware and software tools; and pre and post sales engineering support for designing, building, and managing battery and system solutions. The company offers e-mobility products, automated machines, and UPS products; and pre-sales support, ongoing trainings, and technical support and after installation services. It sells its products through solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was incorporated in 2006 and is headquartered in Herzliya, Israel.