Financial Comparison: GCT Semiconductor (NYSE:GCTS) versus Texas Instruments (NASDAQ:TXN)

GCT Semiconductor (NYSE:GCTS) and Texas Instruments (NASDAQ:TXN) are both technology companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Risk & Volatility

GCT Semiconductor has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500. Comparatively, Texas Instruments has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Profitability

This table compares GCT Semiconductor and Texas Instruments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	-1,301.99%	N/A	-189.45%
Texas Instruments	31.11%	35.77%	17.31%

Earnings and Valuation

This table compares GCT Semiconductor and Texas Instruments”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	$2.87 million	61.37	-$43.37 million	($0.80)	-2.39
Texas Instruments	$19.45 billion	12.43	$5.00 billion	$6.57	40.31

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for GCT Semiconductor and Texas Instruments, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	1	0	2	0	2.33
Texas Instruments	4	8	15	2	2.52

GCT Semiconductor currently has a consensus target price of $3.50, indicating a potential upside of 82.77%. Texas Instruments has a consensus target price of $312.12, indicating a potential upside of 17.86%. Given GCT Semiconductor’s higher possible upside, equities research analysts plainly believe GCT Semiconductor is more favorable than Texas Instruments.

Insider and Institutional Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. Comparatively, 85.0% of Texas Instruments shares are owned by institutional investors. 3.8% of GCT Semiconductor shares are owned by insiders. Comparatively, 0.6% of Texas Instruments shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Texas Instruments beats GCT Semiconductor on 11 of the 15 factors compared between the two stocks.

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.

About Texas Instruments

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States and internationally. The company operates through Analog and Embedded Processing segments. The Analog segment offers power products to manage power requirements across various voltage levels, including battery-management solutions, DC/DC switching regulators, AC/DC and isolated controllers and converters, power switches, linear regulators, voltage references, and lighting products. This segment provides signal chain products that sense, condition, and measure signals to allow information to be transferred or converted for further processing and control, including amplifiers, data converters, interface products, motor drives, clocks, and logic and sensing products. The Embedded Processing segment offers microcontrollers that are used in electronic equipment; digital signal processors for mathematical computations; and applications processors for specific computing activity. This segment offers products for use in various markets, such as industrial, automotive, personal electronics, communications equipment, enterprise systems, and calculators and other. It provides DLP products primarily for use in project high-definition images; calculators; and application-specific integrated circuits. The company markets and sells its semiconductor products through direct sales and distributors, as well as through its website. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.