Comparing PDF Solutions (NASDAQ:PDFS) and Tuya (NYSE:TUYA)

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Tuya and PDF Solutions, as reported by MarketBeat.

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

Tuya presently has a consensus price target of $2.70, indicating a potential upside of 48.35%. PDF Solutions has a consensus price target of $46.00, indicating a potential upside of 38.39%. Given Tuya’s higher possible upside, analysts clearly believe Tuya is more favorable than PDF Solutions.

Insider and Institutional Ownership

11.5% of Tuya shares are held by institutional investors. Comparatively, 79.5% of PDF Solutions shares are held by institutional investors. 2.1% of Tuya shares are held by insiders. Comparatively, 11.2% of PDF Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Tuya has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, PDF Solutions has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Valuation & Earnings

This table compares Tuya and PDF Solutions’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tuya	$229.99 million	3.99	-$60.31 million	($0.11)	-16.55
PDF Solutions	$165.84 million	7.73	$3.11 million	$0.07	474.86

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tuya	-26.23%	-4.66%	-4.27%
PDF Solutions	1.87%	6.09%	4.73%

Summary

PDF Solutions beats Tuya on 10 of the 12 factors compared between the two stocks.

About Tuya

Tuya Inc. offers Internet of Things (IoT) cloud development platform in the People's Republic of China and internationally. The company provides IoT platform-as-a-service that enables brands, original equipment manufacturers, and developers to develop, launch, manage, and monetize software-enabled smart devices and services; and industry software-as-a-service, which enables businesses to deploy, connect, and manage various types of smart devices. It also offers a wide range of cloud-based value-added services to businesses, developers, and end users to develop and manage IoT experiences. In addition, the company sells finished smart devices. It offers its solutions to smart home, smart business, healthcare, education, agriculture, outdoors and sport, and entertainment industries. The company was founded in 2014 and is based in Hangzhou, the People's Republic of China.

About PDF Solutions

PDF Solutions, Inc. provides proprietary software and physical intellectual property products for integrated circuit designs, electrical measurement hardware tools, proven methodologies, and professional services in the United States, China, Japan, and internationally. The company offers Exensio software products, such as Manufacturing Analytics that store collected data in a common environment with a consistent view for enabling product engineers to identify and analyze production yield, performance, reliability, and other issues; Process Control that provides failure detection and classification capabilities for monitoring, alarming, and controlling manufacturing tool sets; Test Operations that offer data collection and analysis capabilities; and Assembly Operations that provide device manufacturers with the capability to link assembly and packaging data, including fabrication and characterization data over the product life cycle. It also provides Design-For-Inspection (DFI) systems, such as DFI On-Chip Instruments; eProbe Non-Contact E-Beam Tool; and Characterization Vehicle (CV) system, which includes CV Test Chips and pdFasTest Electrical Testers, as well as Exensio characterization software, designed to analyze the measurements collected using the eProbe tool. In addition, the company offers Cimetrix software products that enables equipment manufacturers to provide industry standard interfaces on their products; and software-as-a-service, software related services, and characterization services. It sells its technologies and services through direct sales force, service teams, and strategic alliances to integrated device manufacturers, fabless semiconductor companies, foundries, equipment manufacturers, electronics manufacturing suppliers, original device manufacturers, out-sourced semiconductor assembly and test, and system houses. PDF Solutions, Inc. was founded in 1991 and is headquartered in Santa Clara, California.