Critical Contrast: Lam Research (NASDAQ:LRCX) vs. Canadian Solar (NASDAQ:CSIQ)

Lam Research (NASDAQ:LRCX) and Canadian Solar (NASDAQ:CSIQ) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.

Earnings & Valuation

This table compares Lam Research and Canadian Solar”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lam Research	$23.23 billion	16.76	$7.27 billion	$5.76	54.03
Canadian Solar	$4.99 billion	0.15	-$104.13 million	($3.84)	-2.89

Lam Research has higher revenue and earnings than Canadian Solar. Canadian Solar is trading at a lower price-to-earnings ratio than Lam Research, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Lam Research and Canadian Solar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lam Research	0	5	26	1	2.88
Canadian Solar	3	6	3	0	2.00

Lam Research currently has a consensus price target of $364.59, indicating a potential upside of 17.14%. Canadian Solar has a consensus price target of $18.52, indicating a potential upside of 67.09%. Given Canadian Solar’s higher possible upside, analysts plainly believe Canadian Solar is more favorable than Lam Research.

Institutional & Insider Ownership

84.6% of Lam Research shares are held by institutional investors. Comparatively, 52.4% of Canadian Solar shares are held by institutional investors. 0.3% of Lam Research shares are held by company insiders. Comparatively, 21.5% of Canadian Solar shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Lam Research has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Profitability

This table compares Lam Research and Canadian Solar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lam Research	31.27%	67.60%	33.48%
Canadian Solar	-3.73%	-5.57%	-1.43%

Summary

Lam Research beats Canadian Solar on 13 of the 15 factors compared between the two stocks.

About Lam Research

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.

About Canadian Solar

Canadian Solar Inc., together with its subsidiaries, provides solar energy and battery energy storage products and solutions in in Asia, the Americas, Europe, and internationally. The company operates through two segments, CSI Solar and Recurrent Energy. The CSI Solar segment designs, develops, and manufactures solar ingots, wafers, cells, modules, and other solar power and battery storage products. It offers standard solar modules and battery storage solutions; solar system kits, such as inverters, racking systems, and other accessories; power electronic products; and engineering, procurement, and construction (EPC) services, as well as operates battery energy storage projects. The Recurrent Energy segment engages in the development, construction, maintenance, and sale of solar power and battery storage projects; and operation of solar power plants; and sale of electricity. This segment provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. It has a fleet of solar and battery energy storage plants in operation with an aggregate capacity of approximately 1,005 MWp and 600 MWh. It serves distributors, system integrators, project developers, and installers/EPC companies, as well as utility companies or grid operators, public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. It sells its products primarily under its Canadian Solar brand name. Canadian Solar Inc. was incorporated in 2001 and is based in Guelph, Canada.