GCT Semiconductor (NYSE:GCTS) versus IPG Photonics (NASDAQ:IPGP) Critical Review

GCT Semiconductor (NYSE:GCTS) and IPG Photonics (NASDAQ:IPGP) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for GCT Semiconductor and IPG Photonics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCT Semiconductor	0	0	1	0	3.00
IPG Photonics	1	3	1	1	2.33

GCT Semiconductor currently has a consensus price target of $5.00, suggesting a potential upside of 145.70%. IPG Photonics has a consensus price target of $87.75, suggesting a potential upside of 38.91%. Given GCT Semiconductor’s stronger consensus rating and higher probable upside, research analysts plainly believe GCT Semiconductor is more favorable than IPG Photonics.

Earnings and Valuation

This table compares GCT Semiconductor and IPG Photonics”s gross revenue, earnings per share 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
IPG Photonics	$977.13 million	2.80	-$181.53 million	($4.18)	-15.11

GCT Semiconductor has higher earnings, but lower revenue than IPG Photonics.

Institutional & Insider Ownership

28.1% of GCT Semiconductor shares are held by institutional investors. Comparatively, 93.8% of IPG Photonics shares are held by institutional investors. 0.2% of GCT Semiconductor shares are held by company insiders. Comparatively, 38.0% of IPG Photonics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

GCT Semiconductor has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, IPG Photonics has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Profitability

This table compares GCT Semiconductor and IPG Photonics’ 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%
IPG Photonics	-18.58%	2.98%	2.67%

Summary

IPG Photonics beats GCT Semiconductor on 6 of the 11 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 IPG Photonics

IPG Photonics Corporation develops, manufactures, and sells various high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide. Its laser products include hybrid fiber-solid state lasers with green and ultraviolet wavelengths; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; and high-power optical fiber delivery cables, fiber couplers, beam switches, chillers, scanners, and other accessories. The company also offers integrated laser systems; LightWELD, a handheld laser welding system; 2D compact flat sheet cutter systems and multi-axis systems for fine welding, cutting, and drilling; welding seam stepper and picker, a fiber laser welding tool; high precision laser systems; specialized fiber laser systems for material processing applications; robotic and multi-axis workstations for welding, cutting and cladding, flatbed cutting systems, and diode markers; and laser and non-laser robotic welding and automation solutions. It serves materials processing, communications, medical procedures, and advanced applications and communications markets. The company markets its products to original equipment manufacturers, system integrators, and end users through direct sales force, as well as through agreements with independent sales representatives and distributors. IPG Photonics Corporation was founded in 1990 and is headquartered in Marlborough, Massachusetts.