ARM (NASDAQ:ARM) & POET Technologies (NASDAQ:POET) Critical Contrast

ARM (NASDAQ:ARM) and POET Technologies (NASDAQ:POET) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Profitability

This table compares ARM and POET Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	18.37%	12.43%	9.48%
POET Technologies	-5,786.60%	-27.24%	-20.63%

Volatility & Risk

ARM has a beta of 3.4, indicating that its share price is 240% more volatile than the S&P 500. Comparatively, POET Technologies has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for ARM and POET Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	1	6	20	0	2.70
POET Technologies	1	0	0	0	1.00

ARM currently has a consensus price target of $208.79, indicating a potential downside of 40.90%. POET Technologies has a consensus price target of $8.00, indicating a potential downside of 34.91%. Given POET Technologies’ higher probable upside, analysts plainly believe POET Technologies is more favorable than ARM.

Insider and Institutional Ownership

7.5% of ARM shares are held by institutional investors. Comparatively, 2.0% of POET Technologies shares are held by institutional investors. 0.5% of POET Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares ARM and POET Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$4.92 billion	75.86	$904.00 million	$0.84	420.58
POET Technologies	$1.08 million	1,747.34	-$62.96 million	($0.72)	-17.07

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

Summary

ARM beats POET Technologies on 11 of the 14 factors compared between the two stocks.

About ARM

Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.

About POET Technologies

POET Technologies Inc. designs, develops, manufactures, and sells discrete and integrated opto-electronic solutions in Canada, the United States, Singapore, and China. It offers integration solutions based on the POET Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques. It also develops photonic integrated components. The company serves the data center, telecommunications, Internet of things and industrial sensing, automotive LIDAR, optical coherence tomography for medical devices, and virtual reality systems markets. The company was formerly known as Opel Technologies Inc. and changed its name to POET Technologies Inc. in June 2013. POET Technologies Inc. was incorporated in 1972 and is headquartered in Toronto, Canada.