Financial Comparison: Pixelworks (NASDAQ:PXLW) vs. FormFactor (NASDAQ:FORM)

Pixelworks (NASDAQ:PXLW) and FormFactor (NASDAQ:FORM) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

21.4% of Pixelworks shares are held by institutional investors. Comparatively, 98.8% of FormFactor shares are held by institutional investors. 4.7% of Pixelworks shares are held by company insiders. Comparatively, 1.0% of FormFactor shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Pixelworks and FormFactor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pixelworks	$59.68 million	0.75	-$26.18 million	($0.47)	-1.62
FormFactor	$663.10 million	4.79	$82.39 million	$1.74	23.59

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

Risk and Volatility

Pixelworks has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500. Comparatively, FormFactor has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Pixelworks and FormFactor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pixelworks	0	0	3	0	3.00
FormFactor	0	4	4	0	2.50

Pixelworks currently has a consensus price target of $2.17, indicating a potential upside of 185.09%. FormFactor has a consensus price target of $55.38, indicating a potential upside of 34.93%. Given Pixelworks’ stronger consensus rating and higher possible upside, equities analysts plainly believe Pixelworks is more favorable than FormFactor.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pixelworks	-50.01%	-93.16%	-30.04%
FormFactor	18.29%	5.38%	4.43%

Summary

FormFactor beats Pixelworks on 10 of the 14 factors compared between the two stocks.

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.

About FormFactor

FormFactor, Inc. designs, manufactures, and sells probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to semiconductor companies and scientific institutions in the United States, Taiwan, South Korea, China, Europe, Japan, Malaysia, Singapore, and internationally. It operates in two segments, Probe Cards and Systems. The company offers probe cards to test various semiconductor device types, including systems on a chip products, mobile application processors, microprocessors, microcontrollers, and graphic processors, as well as radio frequency, analog, mixed signal, image sensor, electro-optical, dynamic random access memory, NAND flash memory, and NOR flash memory devices, as well as computer processor devices; and analytical probes, which are used for a range of applications, including device characterization, electrical simulation model development, failure analysis, and prototype design debugging for universities, research institutions, semiconductor integrated device manufacturers, semiconductor foundries, and fabless semiconductor companies. It also provides probe systems for semiconductor design engineers to capture and analyze accurate data; surface metrology systems for the development, production, and quality control of semiconductor products; thermal subsystems, such as thermal chucks and other test systems used in probe stations and other applications; and precision cryogenic instruments, semiconductor tests, and measurement systems. In addition, the company offers on-site probe card maintenance and service training, seminars, and telephone support services. It markets and sells its products through direct sales force, manufacturers' representatives, and distributors. The company was incorporated in 1993 and is headquartered in Livermore, California.