PENG (NASDAQ:PENG – Get Free Report) and SkyWater Technology (NASDAQ:SKYT – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Volatility and Risk
PENG has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, SkyWater Technology has a beta of 3.92, suggesting that its share price is 292% more volatile than the S&P 500.
Insider & Institutional Ownership
70.0% of SkyWater Technology shares are owned by institutional investors. 2.4% of PENG shares are owned by insiders. Comparatively, 42.6% of SkyWater Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PENG | 0 | 0 | 4 | 0 | 3.00 |
| SkyWater Technology | 0 | 0 | 4 | 0 | 3.00 |
PENG currently has a consensus price target of $23.75, indicating a potential upside of 38.73%. SkyWater Technology has a consensus price target of $12.75, indicating a potential upside of 55.68%. Given SkyWater Technology’s higher probable upside, analysts clearly believe SkyWater Technology is more favorable than PENG.
Profitability
This table compares PENG and SkyWater Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PENG | -4.48% | 8.05% | 2.14% |
| SkyWater Technology | -4.75% | -12.40% | -2.47% |
Earnings and Valuation
This table compares PENG and SkyWater Technology”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PENG | $1.17 billion | 0.78 | -$52.47 million | ($1.00) | -17.12 |
| SkyWater Technology | $286.68 million | 1.36 | -$30.76 million | ($0.35) | -23.40 |
SkyWater Technology has lower revenue, but higher earnings than PENG. SkyWater Technology is trading at a lower price-to-earnings ratio than PENG, indicating that it is currently the more affordable of the two stocks.
Summary
SkyWater Technology beats PENG on 7 of the 12 factors compared between the two stocks.
About PENG
SMART Global Holdings, Inc., a memory-focused company, engages in the designing and development of enterprise solutions in the United States, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platform Solutions, and LED Solutions segments. The company offers dynamic random access memory modules, solid-state and flash storage, and other advanced memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. It also provides Penguin Computing that focus on technical computing for core and cloud environments through HPC and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications including high-performance products for government, health care, industrial, and telecommunications applications. In addition, the company offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and leading-edge solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, it provides LED-based products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brand. The company sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Milpitas, California.
About SkyWater Technology
SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.
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