Financial Analysis: IQE (OTCMKTS:IQEPF) and Pixelworks (NASDAQ:PXLW)

IQE (OTCMKTS:IQEPF) and Pixelworks (NASDAQ:PXLW) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Institutional and Insider Ownership

21.4% of Pixelworks shares are held by institutional investors. 5.3% of Pixelworks shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares IQE and Pixelworks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IQE	N/A	N/A	N/A
Pixelworks	-73.07%	-318.32%	-12.03%

Risk and Volatility

IQE has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Pixelworks has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for IQE and Pixelworks, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IQE	0	0	0	0	0.00
Pixelworks	1	0	3	0	2.50

Pixelworks has a consensus price target of $15.00, indicating a potential upside of 150.00%. Given Pixelworks’ stronger consensus rating and higher probable upside, analysts plainly believe Pixelworks is more favorable than IQE.

Earnings and Valuation

This table compares IQE and Pixelworks”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IQE	$150.84 million	4.25	-$48.79 million	N/A	N/A
Pixelworks	$693,000.00	55.07	-$22.50 million	($4.72)	-1.27

Pixelworks has lower revenue, but higher earnings than IQE.

Summary

Pixelworks beats IQE on 8 of the 12 factors compared between the two stocks.

About IQE

IQE plc, together with its subsidiaries, develops, manufactures, and sells advanced semiconductor materials. It operates through three segments: Wireless, Photonics, and CMOS++. The company manufactures and sells compound semiconductor materials for the wireless market which includes radio frequency devices for wireless communications, and photonics market, that includes applications that transmit and sense visible and infrared lights, as well as advanced semiconductor materials related to silicon. It operates in the United States, rest of the Americas, France, Germany, Israel, the United Kingdom, rest of Europe, the Middle East, Africa, the People's Republic of China, Japan, Taiwan, and rest of the Asia-Pacific. The company was founded in 1988 and is headquartered in Cardiff, the United Kingdom.

About Pixelworks

Pixelworks, Inc., together with its subsidiaries, develops and markets semiconductor and software solutions for mobile, home and enterprise, and cinema markets in the United States, Japan, China, Taiwan, Korea, and Europe. The company offers imageprocessor integrated circuits, such as embedded microprocessors, digital signal processing technology, and software that control the operations and signal processing within high-end display systems; visual processor integrated circuits that works with a mobile application processor; and transcoder integrated circuits which includes software that control the operations and signal processing for converting multiple bitrates, resolutions and codecs to provide bandwidth efficient video transmissions based on industry standard protocols. It also provides software and platform licensing products comprising Pixelworks Pro Software, a software that enables development and customize the look and feel of mobile products by use of various features, such as absolute color accuracy, HDR tone mapping, SDR-to-HDR conversion, and others; and TrueCut Motion Platform, content creation tool which provides the ability to dial in a motion look on a shot-by-shot basis. The company distributes its products to integrators, branded manufacturers, and branded suppliers. Pixelworks, Inc. was founded in 1997 and is based in Portland, Oregon.