Analyzing SemiLEDs (NASDAQ:LEDS) and FTC Solar (NASDAQ:FTCI)

FTC Solar (NASDAQ:FTCI) and SemiLEDs (NASDAQ:LEDS) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares FTC Solar and SemiLEDs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FTC Solar	-82.90%	-98.67%	-44.11%
SemiLEDs	-39.28%	-91.96%	-17.03%

Valuation and Earnings

This table compares FTC Solar and SemiLEDs”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FTC Solar	$57.35 million	0.67	-$50.29 million	($3.80)	-0.79
SemiLEDs	$5.18 million	2.05	-$2.04 million	($0.37)	-3.99

SemiLEDs has lower revenue, but higher earnings than FTC Solar. SemiLEDs is trading at a lower price-to-earnings ratio than FTC Solar, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

45.4% of FTC Solar shares are held by institutional investors. Comparatively, 76.3% of SemiLEDs shares are held by institutional investors. 22.6% of FTC Solar shares are held by company insiders. Comparatively, 52.1% of SemiLEDs shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for FTC Solar and SemiLEDs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FTC Solar	0	3	2	0	2.40
SemiLEDs	0	0	0	0	0.00

FTC Solar presently has a consensus target price of $8.13, suggesting a potential upside of 169.04%. Given FTC Solar’s stronger consensus rating and higher possible upside, equities analysts clearly believe FTC Solar is more favorable than SemiLEDs.

Risk & Volatility

FTC Solar has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, SemiLEDs has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Summary

SemiLEDs beats FTC Solar on 8 of the 14 factors compared between the two stocks.

About FTC Solar

FTC Solar, Inc. engages in the provision of solar tracker systems, software, and engineering services in the United States, Asia, Europe, the Middle East, North Africa, South Africa, and Australia. The company offers a self-powered, two-panel in-portrait, and single-axis tracker solution under the Voyager brand name; and a one module-in-portrait solar tracker solution under the Pioneer brand name. Its customers include project developers and solar asset owners, as well as engineering, procurement, and construction contractors that design and build solar energy projects. The company was incorporated in 2017 and is headquartered in Austin, Texas.

About SemiLEDs

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.