Analyzing AXT (NASDAQ:AXTI) and Ichor (NASDAQ:ICHR)

AXT (NASDAQ:AXTI) and Ichor (NASDAQ:ICHR) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

49.5% of AXT shares are owned by institutional investors. Comparatively, 94.8% of Ichor shares are owned by institutional investors. 6.0% of AXT shares are owned by insiders. Comparatively, 1.7% of Ichor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for AXT and Ichor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AXT	1	2	2	0	2.20
Ichor	1	2	6	0	2.56

AXT currently has a consensus price target of $43.80, suggesting a potential downside of 58.68%. Ichor has a consensus price target of $64.57, suggesting a potential downside of 9.13%. Given Ichor’s stronger consensus rating and higher possible upside, analysts clearly believe Ichor is more favorable than AXT.

Earnings & Valuation

This table compares AXT and Ichor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AXT	$88.33 million	78.50	-$21.26 million	($0.31)	-341.90
Ichor	$959.26 million	2.58	-$52.78 million	($1.48)	-48.01

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

Profitability

This table compares AXT and Ichor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AXT	-14.69%	-5.71%	-3.65%
Ichor	-5.28%	-1.10%	-0.77%

Volatility & Risk

AXT has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Ichor has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Summary

Ichor beats AXT on 10 of the 14 factors compared between the two stocks.

About AXT

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.

About Ichor

Ichor Holdings, Ltd. engages in the design, engineering, and manufacture of fluid delivery subsystems and components for semiconductor capital equipment in the United States and internationally. It primarily offers gas and chemical delivery systems and subsystems that are used in the manufacturing of semiconductor devices. The company's gas delivery subsystems deliver, monitor, and control gases used in semiconductor manufacturing processes, such as etch and deposition; and chemical delivery subsystems blend and dispense the reactive liquid chemistries used in semiconductor manufacturing processes comprising chemical-mechanical planarization, electroplating, and cleaning. In addition, it manufactures precision machined components, weldments, electron beam, laser-welded components, precision vacuum and hydrogen brazing, surface treatment technologies, and other proprietary products. The company primarily markets its products to equipment OEMs in the semiconductor equipment market in Japan. Ichor Holdings, Ltd. was incorporated in 1999 and is headquartered in Fremont, California.