Dropbox (NASDAQ:DBX – Get Free Report) and Arteris (NASDAQ:AIP – Get Free Report) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.
Risk and Volatility
Dropbox has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Arteris has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500.
Institutional and Insider Ownership
94.8% of Dropbox shares are held by institutional investors. Comparatively, 64.4% of Arteris shares are held by institutional investors. 35.5% of Dropbox shares are held by insiders. Comparatively, 23.3% of Arteris shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dropbox | $2.52 billion | 3.41 | $508.40 million | $1.80 | 21.19 |
| Arteris | $84.61 million | 11.76 | -$34.75 million | ($0.87) | -23.26 |
Dropbox has higher revenue and earnings than Arteris. Arteris is trading at a lower price-to-earnings ratio than Dropbox, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Dropbox and Arteris, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dropbox | 3 | 4 | 1 | 0 | 1.75 |
| Arteris | 1 | 0 | 5 | 0 | 2.67 |
Dropbox presently has a consensus price target of $30.75, suggesting a potential downside of 19.37%. Arteris has a consensus price target of $41.00, suggesting a potential upside of 102.57%. Given Arteris’ stronger consensus rating and higher probable upside, analysts plainly believe Arteris is more favorable than Dropbox.
Profitability
This table compares Dropbox and Arteris’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dropbox | 17.49% | -24.26% | 15.88% |
| Arteris | -46.70% | -295.96% | -22.26% |
Summary
Dropbox beats Arteris on 9 of the 14 factors compared between the two stocks.
About Dropbox
Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.
About Arteris
Arteris, Inc. provides semiconductor interconnect intellectual property (IP) and System-on-Chip (Soc) Integration Automation software solutions (SIA) in the Americas, the Asia Pacific, Europe, and the Middle East. The company develops, licenses, and supports the on-chip interconnect fabric technology used in Soc designs and Network-on-Chip (NoC) interconnect IP. Its products include FlexNoC and FlexWay silicon-proven interconnect IP products; Ncore, a silicon-proven and cache coherent interconnect IP product that provides scalable, configurable, and area efficient characteristics; and CodaCache, a last-level cache semiconductor IP product. The company also offers SIA products comprising Magillem Connectivity that shortens and streamlines the SoC integration process; and Magillem Registers and CSRCompiler that addresses hardware-software integration challenges for SoCs. The company serves semiconductor manufacturers, original equipment manufacturers, hyperscale system houses, semiconductor design houses, and other producers of electronic systems. Arteris, Inc. was founded in 2003 and is headquartered in Campbell, California.
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