Valens Semiconductor (NYSE:VLN) and Sequans Communications (NYSE:SQNS) Critical Survey

Sequans Communications (NYSE:SQNS) and Valens Semiconductor (NYSE:VLN) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Earnings & Valuation

This table compares Sequans Communications and Valens Semiconductor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sequans Communications	$36.76 million	1.91	$57.57 million	($8.08)	-0.61
Valens Semiconductor	$57.86 million	2.63	-$36.58 million	($0.29)	-5.12

Sequans Communications has higher earnings, but lower revenue than Valens Semiconductor. Valens Semiconductor is trading at a lower price-to-earnings ratio than Sequans Communications, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Sequans Communications and Valens Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sequans Communications	1	0	3	1	2.80
Valens Semiconductor	1	0	1	0	2.00

Sequans Communications presently has a consensus target price of $10.83, indicating a potential upside of 121.50%. Valens Semiconductor has a consensus target price of $3.00, indicating a potential upside of 102.02%. Given Sequans Communications’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Sequans Communications is more favorable than Valens Semiconductor.

Profitability

This table compares Sequans Communications and Valens Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sequans Communications	-81.62%	-32.69%	-16.79%
Valens Semiconductor	-44.38%	-23.12%	-18.88%

Volatility and Risk

Sequans Communications has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500. Comparatively, Valens Semiconductor has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Insider & Institutional Ownership

63.3% of Sequans Communications shares are held by institutional investors. Comparatively, 33.9% of Valens Semiconductor shares are held by institutional investors. 9.4% of Sequans Communications shares are held by insiders. Comparatively, 58.9% of Valens Semiconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sequans Communications beats Valens Semiconductor on 9 of the 15 factors compared between the two stocks.

About Sequans Communications

Sequans Communications S.A. engages in the fabless designing, developing, and supplying of cellular semiconductor solutions for massive and broadband Internet of Things (IoT) markets in Taiwan, Korea, China, rest of Asia, Germany, the United States, and internationally. It offers baseband solutions for use in encoding and decoding data based on 4G and 5G protocols for wireless processing platform for a cellular device; RF transceivers used to transmit and receive wireless transmissions; highly integrated SoC solutions that combine various functions into a single die or package; and LTE modules. The company also provides software, including source code and tools to enable manufacturers to integrate their solutions into their devices; and design support services. The company serves OEMs and ODMs Customers, as well as 4G and 5G wireless carriers. Sequans Communications S.A. was incorporated in 2003 and is based in Paris, France.

About Valens Semiconductor

Valens Semiconductor Ltd. engages in the provision of semiconductor products for the audio-video and automotive industries. The company offers HDBaseT technology, which enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power through a single long-reach cable. It also provides audio-video solutions for the enterprise, education, industrial, digital signage, industrial, and medical markets. In addition, it offers automotive chipsets that support advanced driver-assistance systems, automotive data solutions, infotainment, telematics, and backbone connectivity. The company’s product series include VS100, VS2000, VS3000, VS6000, VS7000, Valens USB and power extender, Valens VS6320, USB 3.2 Gen1 extension chipset, VA6000, and VA7000. It has a collaboration with iCatch Technology to develop a 360-degree multi-camera videoconferencing solution. The company operates in Israel, China, Hong Kong, the United States, Japan, Germany, Hungary, and internationally. Valens Semiconductor Ltd. is headquartered in Hod Hasharon, Israel.