Ambarella (NASDAQ:AMBA – Get Free Report) and Disco (OTCMKTS:DSCSY – Get Free Report) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.
Institutional & Insider Ownership
82.1% of Ambarella shares are held by institutional investors. Comparatively, 0.0% of Disco shares are held by institutional investors. 4.5% of Ambarella shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Ambarella and Disco”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ambarella | $417.80 million | 6.76 | -$75.86 million | ($1.29) | -49.63 |
| Disco | $2.90 billion | 13.84 | $894.45 million | $0.87 | 42.54 |
Disco has higher revenue and earnings than Ambarella. Ambarella is trading at a lower price-to-earnings ratio than Disco, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and target prices for Ambarella and Disco, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ambarella | 1 | 6 | 5 | 0 | 2.33 |
| Disco | 0 | 0 | 1 | 1 | 3.50 |
Ambarella presently has a consensus target price of $89.56, suggesting a potential upside of 39.88%. Given Ambarella’s higher possible upside, analysts clearly believe Ambarella is more favorable than Disco.
Risk and Volatility
Ambarella has a beta of 2.38, meaning that its share price is 138% more volatile than the S&P 500. Comparatively, Disco has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.
Profitability
This table compares Ambarella and Disco’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ambarella | -13.48% | -10.03% | -7.73% |
| Disco | 31.65% | 26.03% | 20.56% |
Summary
Disco beats Ambarella on 10 of the 15 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 Disco
Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.
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