SiTime (NASDAQ:SITM) and TranSwitch (OTCMKTS:TXCCQ) Critical Review

SiTime (NASDAQ:SITM) and TranSwitch (OTCMKTS:TXCCQ) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for SiTime and TranSwitch, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SiTime	1	0	3	0	2.50
TranSwitch	0	0	0	0	N/A

SiTime currently has a consensus target price of $130.00, indicating a potential downside of 27.53%. Given SiTime’s higher probable upside, analysts clearly believe SiTime is more favorable than TranSwitch.

Insider and Institutional Ownership

84.3% of SiTime shares are owned by institutional investors. 2.3% of SiTime shares are owned by insiders. Comparatively, 6.3% of TranSwitch shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

SiTime has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, TranSwitch has a beta of 14.75, indicating that its share price is 1,375% more volatile than the S&P 500.

Valuation and Earnings

This table compares SiTime and TranSwitch”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SiTime	$154.81 million	26.50	-$80.54 million	($4.13)	-43.44
TranSwitch	N/A	N/A	N/A	N/A	N/A

TranSwitch has lower revenue, but higher earnings than SiTime.

Profitability

This table compares SiTime and TranSwitch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SiTime	-60.46%	-10.53%	-8.40%
TranSwitch	N/A	N/A	N/A

Summary

TranSwitch beats SiTime on 5 of the 9 factors compared between the two stocks.

About SiTime

SiTime Corporation designs, develops, and sells silicon timing systems solutions in Taiwan, Hong Kong, the United States, Singapore, and internationally. The company provides resonators and clock integrated circuits, and various types of oscillators. It serves various markets, including communications, datacenter, enterprise, automotive, industrial, internet of things, mobile, consumer, and aerospace and defense. The company sells its products directly to customers, distributors, and resellers. SiTime Corporation was incorporated in 2003 and is based in Santa Clara, California.

About TranSwitch

TranSwitch Corporation, together with its subsidiaries, designs, develops, and supplies integrated circuit and intellectual property solutions that provide functionality for voice, data, and video communications equipment for the customer premises and network infrastructure markets. The company provides integrated multi-core network processor system-on-a-chip (SoC) solutions for fixed, 3G and 4G mobile, VoIP, and multimedia applications. It offers converged network infrastructure products, including infrastructure VoIP processors for wire-line and wireless carrier equipment; access VoIP processors; and EoS/EoPDH mappers and framers for carriers to transport data traffic over SONET, SDH, and PDH networks. The company also offers broadband customer premises equipment, such as connectivity solutions comprising HDMI, DisplayPort, MHL, HDP, Ethernet IP cores, and MHDP transceivers for consumer electronics, home network equipment, and industrial and automotive applications; and multi-service SoCs for customer premises equipment that support telephone voice, fax, and routing functionality over broadband access networks. TranSwitch Corporation sells its products to public network system original equipment manufacturers (OEMs), WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs; and government, universities, and private laboratories. The company offers its products directly in North America, Taiwan, China, Japan, Korea, and Europe, as well as through a network of distributors in North America, Asia, and Europe. TranSwitch Corporation was founded in 1988 and is headquartered in Shelton, Connecticut. On November 21, 2013, TranSwitch Corporation filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the District of Connecticut.