Critical Comparison: ASE Technology (NYSE:ASX) versus ARM (NASDAQ:ARM)

ASE Technology (NYSE:ASX) and ARM (NASDAQ:ARM) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Valuation and Earnings

This table compares ASE Technology and ARM’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ASE Technology	$18.69 billion	1.33	$1.16 billion	$0.46	24.63
ARM	$3.23 billion	51.48	$306.00 million	N/A	N/A

ASE Technology has higher revenue and earnings than ARM.

Insider & Institutional Ownership

6.8% of ASE Technology shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 22.9% of ASE Technology shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for ASE Technology and ARM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ASE Technology	0	1	1	0	2.50
ARM	1	12	14	0	2.48

ASE Technology presently has a consensus target price of $9.20, indicating a potential downside of 18.80%. Given ASE Technology’s stronger consensus rating and higher possible upside, equities research analysts plainly believe ASE Technology is more favorable than ARM.

Profitability

This table compares ASE Technology and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ASE Technology	5.41%	10.09%	4.60%
ARM	9.46%	16.94%	11.45%

Summary

ARM beats ASE Technology on 6 of the 11 factors compared between the two stocks.

About ASE Technology

ASE Technology Holding Co., Ltd., together with its subsidiaries, provides semiconductors packaging and testing, and electronic manufacturing services in the United States, Taiwan, Asia, Europe, and internationally. It develops, constructs, sells, leases, and manages real estate properties; produces substrates; offers information software, equipment leasing, investment advisory, and warehousing management services; commercial complex, after-sales, and support services; manages parking lot services; processes and sells computer and communication peripherals, electronic components, telecommunications equipment, and motherboards; and imports and exports goods and technology. ASE Technology Holding Co., Ltd. was founded in 1984 and is based in Kaohsiung, Taiwan.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.