ARM (NASDAQ:ARM) and NeoMagic (OTCMKTS:NMGC) Head-To-Head Review

NeoMagic (OTCMKTS:NMGC) and ARM (NASDAQ:ARM) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Valuation and Earnings

This table compares NeoMagic and ARM”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeoMagic	N/A	N/A	N/A	N/A	N/A
ARM	$3.54 billion	42.33	$306.00 million	$0.60	238.00

ARM has higher revenue and earnings than NeoMagic.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NeoMagic and ARM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeoMagic	0	0	0	0	0.00
ARM	2	6	18	1	2.67

ARM has a consensus price target of $150.32, suggesting a potential upside of 5.26%. Given ARM’s stronger consensus rating and higher probable upside, analysts plainly believe ARM is more favorable than NeoMagic.

Profitability

This table compares NeoMagic and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NeoMagic	N/A	N/A	N/A
ARM	18.13%	13.69%	9.70%

Volatility & Risk

NeoMagic has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, ARM has a beta of 4.67, indicating that its stock price is 367% more volatile than the S&P 500.

Institutional and Insider Ownership

7.5% of ARM shares are owned by institutional investors. 12.7% of NeoMagic shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

ARM beats NeoMagic on 10 of the 11 factors compared between the two stocks.

About NeoMagic

NeoMagic Corporation designs and delivers semiconductors and software solutions for video, television, imaging, graphic, and audio devices. It offers microcontrollers; horizon digital picture frame and digital mobile TV solutions; and SOC processors, such as application processors and Neomobile TV solutions. The company, through its MercadoMagico.com division, operates an e-Commerce platform that allows user to buy and sell products from one another or buy premium electronic products. It sells its applications processors under the MiMagic brand name. The company was founded in 1993 and is based in Milpitas, California.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.