Sogou (NYSE:SOGO) and PDF Solutions (NASDAQ:PDFS) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Sogou and PDF Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sogou 5.21% 6.98% 4.74%
PDF Solutions -3.78% -1.66% -1.39%

Risk and Volatility

Sogou has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, PDF Solutions has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Sogou and PDF Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sogou 0 2 2 0 2.50
PDF Solutions 0 0 2 0 3.00

Sogou presently has a consensus price target of $3.95, suggesting a potential downside of 3.66%. PDF Solutions has a consensus price target of $24.25, suggesting a potential upside of 26.57%. Given PDF Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe PDF Solutions is more favorable than Sogou.

Institutional & Insider Ownership

5.0% of Sogou shares are owned by institutional investors. Comparatively, 74.3% of PDF Solutions shares are owned by institutional investors. 12.8% of PDF Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Sogou and PDF Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sogou $1.17 billion 1.37 $89.11 million $0.23 17.83
PDF Solutions $85.58 million 7.34 -$5.42 million ($0.17) -112.71

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

Summary

Sogou beats PDF Solutions on 7 of the 13 factors compared between the two stocks.

Sogou Company Profile

Sogou Inc. provides search and search-related services in the People's Republic of China. The company provides Sogou Search, a search engine; and Sogou Input Method, a Chinese language input software for PC and mobile users. It also offers search and search-related advertising services; Internet value-added services related to the operation of Web games and mobile games developed by third parties; and online reading services, as well as other products and services, including smart hardware products. The company was incorporated in 2005 and is based in Beijing, the People's Republic of China. Sogou Inc. is a subsidiary of Sohu.com Limited.

PDF Solutions Company Profile

PDF Solutions, Inc. provides hardware, software, and intellectual property products to integrated circuit (IC) vendors in the United States, China, Taiwan, Germany, and internationally. It offers Exensio platform, which consists of Exensio-Yield that collects and stores yield data in an analysis-ready database, which enables product engineers to identify and analyze production yield, performance, reliability, and other issues; Exensio-Control, which provides fault detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Exensio-Test that offers data collection and analysis capability; Exensio Characterization, which encapsulates test structure analysis functionality of electrical and in-line inspection data from CV test chips and design-for-inspection DFI on-chip instruments; and Exensio ALPS that provides device manufacturers with the capability to link all device data, including fabrication and characterization data from every step of the product life cycle. The company also provides DFI Systems, such as DFI on-chip instruments, eProbe non-contactless E-beam tool, and Exensio characterization software; and Characterization Vehicle (CV) infrastructure, which includes CV test chips and pdFasTest electrical testers. In addition, it offers FIRE software, which analyzes an IC design to compute its systematic and random yield loss; and Template technology that includes Templatyzer software and IP for identifying and developing a set of layout patterns. The company sells its technologies and services through direct sales force, solution service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, out-sourced semiconductor assembly and test, and system houses in the microprocessors, memory, graphics, image sensor solutions, and communications segments. PDF Solutions, Inc. was founded in 1992 and is headquartered in Santa Clara, California.

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