Contrasting Semtech (NASDAQ:SMTC) & Enphase Energy (NASDAQ:ENPH)

Enphase Energy (NASDAQ:ENPH) and Semtech (NASDAQ:SMTC) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Enphase Energy and Semtech, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enphase Energy	3	12	7	0	2.18
Semtech	0	3	15	1	2.89

Enphase Energy presently has a consensus target price of $35.11, suggesting a potential upside of 34.69%. Semtech has a consensus target price of $212.00, suggesting a potential upside of 85.01%. Given Semtech’s stronger consensus rating and higher probable upside, analysts clearly believe Semtech is more favorable than Enphase Energy.

Institutional & Insider Ownership

72.1% of Enphase Energy shares are held by institutional investors. 2.9% of Enphase Energy shares are held by company insiders. Comparatively, 0.4% of Semtech shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Enphase Energy and Semtech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enphase Energy	7.49%	9.16%	3.51%
Semtech	13.11%	21.74%	8.98%

Volatility and Risk

Enphase Energy has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Semtech has a beta of 2.5, indicating that its stock price is 150% more volatile than the S&P 500.

Earnings and Valuation

This table compares Enphase Energy and Semtech”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enphase Energy	$1.47 billion	2.34	$172.13 million	$0.67	38.91
Semtech	$1.05 billion	10.19	-$40.38 million	$1.51	75.89

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

Summary

Semtech beats Enphase Energy on 11 of the 15 factors compared between the two stocks.

About Enphase Energy

Enphase Energy, Inc. develops and sells energy technology for solar-powered homes and businesses. Its products include microinverters, which convert the direct current generated by solar panels into alternating current for use in buildings or delivery to the grid, as well as battery storage systems, electric vehicle chargers and related energy management software. The company’s integrated systems are designed to help customers monitor and manage solar generation, energy storage and electricity use.

About Semtech

Semtech Corporation is a semiconductor and connectivity technology company that develops products for communications, industrial, and consumer applications. Its portfolio includes analog and mixed-signal semiconductors, signal-integrity and protection products, and power-management solutions used in electronic systems. The company is known for LoRa technology, which supports low-power, long-range wireless communications for Internet of Things (IoT) devices. Semtech also provides cellular IoT modules, routers, and related services, expanding its connectivity offerings through its acquisition of Sierra Wireless in 2023.