Reviewing Flextronics International (FLEX) and Pixelworks (NASDAQ:PXLW)

Flextronics International (NASDAQ: FLEX) and Pixelworks (NASDAQ:PXLW) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Analyst Ratings

This is a summary of current ratings and price targets for Flextronics International and Pixelworks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flextronics International 0 2 7 1 2.90
Pixelworks 0 0 2 0 3.00

Flextronics International currently has a consensus target price of $17.39, indicating a potential upside of 4.75%. Pixelworks has a consensus target price of $4.25, indicating a potential downside of 7.41%. Given Flextronics International’s higher probable upside, research analysts plainly believe Flextronics International is more favorable than Pixelworks.

Earnings & Valuation

This table compares Flextronics International and Pixelworks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Flextronics International $23.99 billion 0.37 $1.22 billion $0.63 26.35
Pixelworks $73.07 million 2.12 $7.50 million $0.10 45.90

Flextronics International has higher revenue and earnings than Pixelworks. Flextronics International is trading at a lower price-to-earnings ratio than Pixelworks, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Flextronics International and Pixelworks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flextronics International 1.41% 20.46% 4.30%
Pixelworks 4.35% 20.00% 11.65%

Risk and Volatility

Flextronics International has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Pixelworks has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Institutional & Insider Ownership

95.0% of Flextronics International shares are held by institutional investors. Comparatively, 33.7% of Pixelworks shares are held by institutional investors. 0.8% of Flextronics International shares are held by company insiders. Comparatively, 4.5% of Pixelworks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Flextronics International beats Pixelworks on 9 of the 15 factors compared between the two stocks.

About Flextronics International

Flex Ltd, formerly Flextronics International Ltd. provides design, engineering, manufacturing, and supply chain services and solutions. The Company designs, builds, ships and services packaged consumer electronics and industrial products for original equipment manufacturers (OEMs). Its segments include High Reliability Solutions (HRS), Consumer Technologies Group (CTG), Industrial and Emerging Industries (IEI) and Communications & Enterprise Compute (CEC). The HRS segment consists of its medical business, automotive business, and defense and aerospace businesses. The CTG segment includes its mobile devices business, consumer electronics business and high-volume computing business. The IEI segment consists of semiconductor and capital equipment, office solutions, household industrial and lifestyle, industrial automation and kiosks, energy and metering, and lighting. The CEC segment includes radio access base stations, remote radio heads, and small cells for wireless infrastructure.

About Pixelworks

Pixelworks, Inc. designs, develops and markets video and pixel processing semiconductors, intellectual property cores, software and custom application specific integrated circuit (ASIC) solutions for digital video applications. The Company is engaged in the design and development of integrated circuits (ICs) for use in electronic display devices. It provides its customers with software development tools and with software that provides basic functionality for its ICs and enables connectivity of its customers’ products. Its primary target markets include digital projection systems, Ultrabook devices, tablets and smartphones. Its video display processing technologies include Halo Free Motion Estimation and Motion Compensation (MEMC), Advanced Scaling, Mobile Video Display Processing, and Vuemagic and Networked Displays. Its primary video display processor product categories include ImageProcessor ICs, Video Co-Processor ICs and Networked Display ICs.

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