Contrasting Ultra Clean (NASDAQ:UCTT) and GCT Semiconductor (NYSE:GCTS)

GCT Semiconductor (NYSE:GCTS) and Ultra Clean (NASDAQ:UCTT) are both small-cap computer and 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.

Valuation and Earnings

This table compares GCT Semiconductor and Ultra Clean”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCT Semiconductor	N/A	N/A	-$2.00 million	N/A	N/A
Ultra Clean	$1.73 billion	1.00	-$31.10 million	$0.08	483.06

GCT Semiconductor has higher earnings, but lower revenue than Ultra Clean.

Analyst Ratings

This is a summary of recent recommendations for GCT Semiconductor and Ultra Clean, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	0	0	1	0	3.00
Ultra Clean	0	0	4	0	3.00

GCT Semiconductor presently has a consensus target price of $8.00, suggesting a potential upside of 218.09%. Ultra Clean has a consensus target price of $57.75, suggesting a potential upside of 49.46%. Given GCT Semiconductor’s higher probable upside, equities research analysts clearly believe GCT Semiconductor is more favorable than Ultra Clean.

Profitability

This table compares GCT Semiconductor and Ultra Clean’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCT Semiconductor	N/A	N/A	-27.81%
Ultra Clean	0.18%	4.08%	1.94%

Institutional and Insider Ownership

28.1% of GCT Semiconductor shares are owned by institutional investors. Comparatively, 96.1% of Ultra Clean shares are owned by institutional investors. 0.2% of GCT Semiconductor shares are owned by insiders. Comparatively, 2.2% of Ultra Clean 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.

Volatility & Risk

GCT Semiconductor has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Ultra Clean has a beta of 2.1, suggesting that its share price is 110% more volatile than the S&P 500.

Summary

Ultra Clean beats GCT Semiconductor on 8 of the 10 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 Ultra Clean

Ultra Clean Holdings, Inc. develops and supplies critical subsystems, components and parts, and ultra-high purity cleaning and analytical services for the semiconductor industry in the United States and internationally. The company provides ultra-clean valves, high purity connectors, industrial process connectors and valves, pneumatic actuators, manifolds and safety solutions, hoses, pressure gauges, and gas line and component heaters; chemical delivery modules that deliver gases and reactive chemicals in a liquid or gaseous form from a centralized subsystem to the reaction chamber; and gas delivery systems, such as weldments, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system. It also offers various industrial and automation production equipment; fluid delivery systems consist of one or more chemical delivery units, including PFA tubing, filters, flow controllers, regulators, component heaters, and an integrated electronic and/or pneumatic control system; precision robotic systems; top-plate assemblies; frame assemblies; process modules, a subsystem of semiconductor manufacturing tools that process integrated circuits onto wafers; and other high-level assemblies. In addition, the company provides tool chamber parts cleaning and coating services; micro-contamination analysis services for tool parts, wafers and depositions, chemicals, cleanroom materials, deionized water, and airborne molecular contamination; and analytical verification services for process tool chamber part cleaning. It primarily serves original equipment manufacturing customers in the semiconductor capital equipment and semiconductor integrated device manufacturing industries, as well as display, consumer, medical, energy, industrial, and research equipment industries. The company was founded in 1991 and is headquartered in Hayward, California.