Sigma Designs (NASDAQ: SIGM) and Super Micro Computer (NASDAQ:SMCI) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitabiliy, risk, dividends and earnings.
Valuation & Earnings
This table compares Sigma Designs and Super Micro Computer’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Sigma Designs | $206.33 million | 1.16 | $4.71 million | N/A | N/A |
| Super Micro Computer | $2.34 billion | 0.56 | $101.73 million | $1.34 | 20.22 |
Super Micro Computer has higher revenue and earnings than Sigma Designs.
Insider & Institutional Ownership
59.7% of Sigma Designs shares are held by institutional investors. Comparatively, 71.6% of Super Micro Computer shares are held by institutional investors. 4.5% of Sigma Designs shares are held by insiders. Comparatively, 24.0% of Super Micro Computer shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Sigma Designs has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Super Micro Computer has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500.
Profitability
This table compares Sigma Designs and Super Micro Computer’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sigma Designs | -12.15% | -11.77% | -8.10% |
| Super Micro Computer | 2.74% | 9.08% | 5.08% |
Analyst Recommendations
This is a summary of current ratings and recommmendations for Sigma Designs and Super Micro Computer, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sigma Designs | 1 | 2 | 3 | 0 | 2.33 |
| Super Micro Computer | 0 | 1 | 5 | 0 | 2.83 |
Sigma Designs presently has a consensus target price of $8.60, indicating a potential upside of 37.60%. Super Micro Computer has a consensus target price of $32.17, indicating a potential upside of 18.70%. Given Sigma Designs’ higher possible upside, research analysts plainly believe Sigma Designs is more favorable than Super Micro Computer.
Summary
Super Micro Computer beats Sigma Designs on 9 of the 12 factors compared between the two stocks.
About Sigma Designs
Sigma Designs, Inc. is a provider of global integrated semiconductor solutions. The Company offers media platforms for use in the home entertainment and home control markets. The Company sells its products into markets, including smart television, media connectivity, set-top box and Internet of Things (IoT) devices. The Company’s media processor product line consists of a range of functionally similar platforms that are based on integrated chips, embedded software and hardware reference designs. The Company’s media connectivity product line consists of wired home networking controller chipsets that are designed to provide connectivity solutions between various home entertainment products and incoming video streams. The Company’s IoT devices product line consists of its wireless Z-Wave chips and modules. The Company is engaged in the license of its internally developed intellectual property. It also offers legacy products that are sold into prosumer and other industrial applications.
About Super Micro Computer
Super Micro Computer, Inc. is engaged in developing and providing end-to-end green computing solutions to the cloud computing, data center, enterprise information technology (IT), big data, high performance computing (HPC) and Internet of Things (IoT)/embedded markets. The Company’s solutions range from server, storage, blade and workstations to full racks, networking devices, server management software and technology support and services. The Company sells its server systems and server subsystems and accessories through a combination of distributors, including value added resellers and system integrators, and other equipment manufacturers (OEMs). As of June 30, 2016, the Company offered over 4,950 stock keeping units (SKUs), including SKUs for server and storage systems, serverboards, chassis, power supplies and other system accessories. The Company develops and manufactures server solutions based upon a modular and open architecture.
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