PDF Solutions (PDFS) & Axcelis Technologies (NASDAQ:ACLS) Critical Survey

PDF Solutions (NASDAQ: PDFS) and Axcelis Technologies (NASDAQ:ACLS) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

PDF Solutions has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Axcelis Technologies has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Insider & Institutional Ownership

78.0% of PDF Solutions shares are owned by institutional investors. Comparatively, 73.7% of Axcelis Technologies shares are owned by institutional investors. 16.2% of PDF Solutions shares are owned by insiders. Comparatively, 5.7% of Axcelis Technologies 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.

Analyst Recommendations

This is a summary of current ratings and price targets for PDF Solutions and Axcelis Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PDF Solutions 0 2 1 0 2.33
Axcelis Technologies 0 1 3 0 2.75

PDF Solutions currently has a consensus price target of $23.33, indicating a potential upside of 54.12%. Axcelis Technologies has a consensus price target of $24.80, indicating a potential upside of 20.10%. Given PDF Solutions’ higher probable upside, research analysts clearly believe PDF Solutions is more favorable than Axcelis Technologies.

Profitability

This table compares PDF Solutions and Axcelis Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PDF Solutions 5.29% 2.78% 2.49%
Axcelis Technologies 9.10% 12.52% 8.41%

Earnings & Valuation

This table compares PDF Solutions and Axcelis Technologies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PDF Solutions $104.27 million 4.69 $9.44 million $0.18 84.11
Axcelis Technologies $324.69 million 1.99 $37.37 million $0.91 22.69

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

Summary

Axcelis Technologies beats PDF Solutions on 8 of the 14 factors compared between the two stocks.

About PDF Solutions

PDF Solutions, Inc. is a provider of infrastructure technologies and services for integrated circuits (IC). The Company’s technologies and services focus on the IC manufacturing process life cycle. It operates in the segment of licensing and implementation of yield improvement solutions for integrated circuit manufacturers. The Company’s solutions combine software, test chips, an electrical wafer test system, methodologies and professional services. The Company has developed solutions for yield simulation, analysis, loss detection, and improvement. Its characterization vehicle infrastructure (CVi) enables customers to electrically characterize the manufacturing process, and establish fail-rate information needed to calibrate manufacturing yield models and prioritize yield improvement activities. Its Exensio YieldAware solution combines software and services to enable customers to collect and combine product test data and equipment signals during production.

About Axcelis Technologies

Axcelis Technologies, Inc. designs, manufactures and services ion implantation and other processing equipment used in the fabrication of semiconductor chips. The Company also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. The Company offers a complete line of high energy, high current and medium current implanters for all application requirements. The Company’s Purion XE high energy system combines its radio frequency (RF) Linac high energy, spot beam technology with the Purion platform. The Company also offers the Purion M medium current system. The Company’s Purion M systems also offer differentiation for specialty applications, such as hot silicon carbide. The Company’s Purion H high current system is extendable into ultra-low energy applications to satisfy future process requirements, including leakage current performance.

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