Reviewing GCT Semiconductor (NYSE:GCTS) and Sequans Communications (NYSE:SQNS)

Sequans Communications (NYSE:SQNS) and GCT Semiconductor (NYSE:GCTS) are both small-cap technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Volatility & Risk

Sequans Communications has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, GCT Semiconductor has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500.

Insider and Institutional Ownership

63.3% of Sequans Communications shares are held by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are held by institutional investors. 9.4% of Sequans Communications shares are held by insiders. Comparatively, 3.8% of GCT Semiconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Sequans Communications and GCT Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sequans Communications	-637.49%	-54.51%	-27.81%
GCT Semiconductor	-1,301.99%	N/A	-189.45%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Sequans Communications and GCT Semiconductor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sequans Communications	1	1	2	0	2.25
GCT Semiconductor	1	0	2	0	2.33

Sequans Communications currently has a consensus target price of $11.50, suggesting a potential upside of 289.96%. GCT Semiconductor has a consensus target price of $3.50, suggesting a potential upside of 71.15%. Given Sequans Communications’ higher possible upside, equities analysts clearly believe Sequans Communications is more favorable than GCT Semiconductor.

Earnings and Valuation

This table compares Sequans Communications and GCT Semiconductor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sequans Communications	$23.64 million	1.87	-$109.28 million	($10.48)	-0.28
GCT Semiconductor	$2.87 million	65.53	-$43.37 million	($0.80)	-2.56

GCT Semiconductor has lower revenue, but higher earnings than Sequans Communications. GCT Semiconductor is trading at a lower price-to-earnings ratio than Sequans Communications, indicating that it is currently the more affordable of the two stocks.

Summary

Sequans Communications beats GCT Semiconductor on 7 of the 13 factors compared between the two stocks.

About Sequans Communications

Sequans Communications S.A. engages in the fabless designing, developing, and supplying of cellular semiconductor solutions for massive and broadband Internet of Things (IoT) markets in Taiwan, Korea, China, rest of Asia, Germany, the United States, and internationally. It offers baseband solutions for use in encoding and decoding data based on 4G and 5G protocols for wireless processing platform for a cellular device; RF transceivers used to transmit and receive wireless transmissions; highly integrated SoC solutions that combine various functions into a single die or package; and LTE modules. The company also provides software, including source code and tools to enable manufacturers to integrate their solutions into their devices; and design support services. The company serves OEMs and ODMs Customers, as well as 4G and 5G wireless carriers. Sequans Communications S.A. was incorporated in 2003 and is based in Paris, France.

About GCT Semiconductor

GCT Semiconductor Holding, Inc., operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.