Cadence Design Systems (NASDAQ:CDNS) and Synopsys (NASDAQ:SNPS) are both large-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.
This is a breakdown of recent ratings and recommmendations for Cadence Design Systems and Synopsys, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cadence Design Systems||0||4||4||0||2.50|
Cadence Design Systems currently has a consensus target price of $76.00, suggesting a potential upside of 15.41%. Synopsys has a consensus target price of $157.25, suggesting a potential upside of 19.48%. Given Synopsys’ stronger consensus rating and higher probable upside, analysts plainly believe Synopsys is more favorable than Cadence Design Systems.
Valuation and Earnings
This table compares Cadence Design Systems and Synopsys’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cadence Design Systems||$2.14 billion||8.64||$345.78 million||$1.23||53.54|
|Synopsys||$3.36 billion||5.89||$532.37 million||$3.45||38.15|
Synopsys has higher revenue and earnings than Cadence Design Systems. Synopsys is trading at a lower price-to-earnings ratio than Cadence Design Systems, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
85.7% of Cadence Design Systems shares are held by institutional investors. Comparatively, 88.1% of Synopsys shares are held by institutional investors. 2.3% of Cadence Design Systems shares are held by company insiders. Comparatively, 1.8% of Synopsys 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.
This table compares Cadence Design Systems and Synopsys’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cadence Design Systems||18.54%||30.74%||16.63%|
Risk & Volatility
Cadence Design Systems has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.
Synopsys beats Cadence Design Systems on 9 of the 15 factors compared between the two stocks.
About Cadence Design Systems
Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel simulation platform; Palladium Z1, an enterprise emulation platform; and Protium S1 field-programmable gate array prototyping platform. The company also provides digital IC design products, such as logic design products for chip planning, design, verification, and test technologies and services; physical implementation tools, including place and route, signal integrity, optimization, and multiple patterning preparation; and signoff products to signoff the design as ready for manufacture by a silicon foundry, as well as design for manufacturing products for use in the product development process. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system interconnect design products to develop printed circuit boards and IC packages. Further, the company provides design intellectual property (IP) products consisting of pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP and memory models for use in system-level verification to model correct behavior of full systems interacting with their environments. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. Cadence Design Systems, Inc. was founded in 1988 and is headquartered in San Jose, California.
Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits (ICs). It offers Fusion Design Platform, a digital design implementation solution; Verification Continuum Platform, which provides virtual prototyping, static and formal verification, simulation, emulation, field-programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. The company also offers intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, SATA, MIPI, HDMI, and Bluetooth low energy applications; analog IP, including data converters and audio codecs; and system-on-chip infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating point components, and ARM AMBA interconnect fabric and peripherals. In addition, it provides logic libraries and embedded memories; configurable processor cores and application-specific instruction-set processor tools for embedded applications; IP subsystems for audio, sensor, and data fusion functionality; and security IP solutions. Further, the company offers Platform Architect tools for SoC architecture analysis and optimization; virtual prototyping solutions; and HAPS FPGA-based prototyping systems, as well as a series of tools used in the design of optical systems and photonic devices. Additionally, it provides testing tools, services, and programs, which include security testing, managed services, programs and professional services, and training that enable its customers to detect and remediate defects in the software development lifecycle; manufacturing solutions for semiconductor manufacturers to develop fabrication processes; and professional and other services. Synopsys, Inc. has collaboration with Palma Ceia SemiDesign, Inc. to provide ready-to-use NB-IoT solution. The company was founded in 1986 and is headquartered in Mountain View, California.
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