Credo Technology Group (NASDAQ:CRDO) & Axcelis Technologies (NASDAQ:ACLS) Critical Analysis

Axcelis Technologies (NASDAQ:ACLS) and Credo Technology Group (NASDAQ:CRDO) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares Axcelis Technologies and Credo Technology Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axcelis Technologies	11.74%	11.51%	8.75%
Credo Technology Group	33.83%	28.77%	25.93%

Insider & Institutional Ownership

90.0% of Axcelis Technologies shares are owned by institutional investors. Comparatively, 80.5% of Credo Technology Group shares are owned by institutional investors. 0.5% of Axcelis Technologies shares are owned by insiders. Comparatively, 9.1% of Credo Technology Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Axcelis Technologies and Credo Technology Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axcelis Technologies	1	2	2	0	2.20
Credo Technology Group	0	3	14	1	2.89

Axcelis Technologies presently has a consensus price target of $145.33, indicating a potential upside of 30.73%. Credo Technology Group has a consensus price target of $262.67, indicating a potential upside of 85.75%. Given Credo Technology Group’s stronger consensus rating and higher probable upside, analysts clearly believe Credo Technology Group is more favorable than Axcelis Technologies.

Earnings & Valuation

This table compares Axcelis Technologies and Credo Technology Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axcelis Technologies	$839.05 million	4.09	$120.24 million	$3.36	33.09
Credo Technology Group	$1.34 billion	19.91	$472.28 million	$2.81	50.32

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

Risk & Volatility

Axcelis Technologies has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Credo Technology Group has a beta of 3.29, indicating that its share price is 229% more volatile than the S&P 500.

Summary

Credo Technology Group beats Axcelis Technologies on 13 of the 15 factors compared between the two stocks.

About Axcelis Technologies

Axcelis Technologies develops and manufactures ion implantation equipment used in semiconductor production. Its systems introduce precisely controlled impurities into silicon wafers, helping manufacturers create the electrical properties needed for semiconductor devices. The company’s product lineup includes its Purion family of ion implantation systems. Alongside equipment, Axcelis provides related services such as maintenance, upgrades, spare parts and technical support. Its products and services support semiconductor manufacturing for applications including power devices, which are used in areas such as electric vehicles and energy systems.

About Credo Technology Group

Credo Technology Group designs and supplies high-speed connectivity solutions for data infrastructure, including data centers and networking systems. Its products help move data between processors, servers, switches and other equipment used in demanding, high-bandwidth environments. The company’s offerings include active electrical cables, semiconductor and optical digital signal processing products, retimers, and other connectivity components. These solutions are used in applications such as cloud computing and artificial intelligence infrastructure.