GCT Semiconductor (NYSE:GCTS) and Sequans Communications (NYSE:SQNS) Head-To-Head Analysis

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

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%

Institutional and Insider Ownership

63.3% of Sequans Communications shares are owned by institutional investors. Comparatively, 28.1% of GCT Semiconductor shares are owned by institutional investors. 9.4% of Sequans Communications shares are owned by insiders. Comparatively, 3.8% of GCT Semiconductor 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 summary of recent recommendations 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 presently has a consensus target price of $11.50, suggesting a potential upside of 299.86%. GCT Semiconductor has a consensus target price of $3.50, suggesting a potential upside of 56.60%. Given Sequans Communications’ higher probable upside, equities research analysts clearly believe Sequans Communications is more favorable than GCT Semiconductor.

Earnings & Valuation

This table compares Sequans Communications and GCT Semiconductor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sequans Communications	$27.19 million	1.58	-$109.28 million	($10.48)	-0.27
GCT Semiconductor	$2.87 million	71.62	-$43.37 million	($0.80)	-2.79

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.

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.

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.