Riskified (NYSE:RSKD) vs. Cadence Design Systems (NASDAQ:CDNS) Head-To-Head Comparison

Cadence Design Systems (NASDAQ:CDNS) and Riskified (NYSE:RSKD) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Institutional and Insider Ownership

84.8% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 59.0% of Riskified shares are owned by institutional investors. 0.5% of Cadence Design Systems shares are owned by company insiders. Comparatively, 17.4% of Riskified shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Cadence Design Systems has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Riskified has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.

Profitability

This table compares Cadence Design Systems and Riskified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Design Systems	23.60%	27.98%	15.35%
Riskified	-4.23%	-3.93%	-2.79%

Valuation & Earnings

This table compares Cadence Design Systems and Riskified”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Design Systems	$5.30 billion	15.04	$1.11 billion	$5.03	57.53
Riskified	$344.64 million	2.61	-$27.57 million	($0.11)	-55.14

Cadence Design Systems has higher revenue and earnings than Riskified. Riskified 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Cadence Design Systems and Riskified, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Design Systems	0	3	14	0	2.82
Riskified	2	3	2	0	2.00

Cadence Design Systems presently has a consensus price target of $403.88, indicating a potential upside of 39.57%. Riskified has a consensus price target of $6.50, indicating a potential upside of 7.17%. Given Cadence Design Systems’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Cadence Design Systems is more favorable than Riskified.

Summary

Cadence Design Systems beats Riskified on 12 of the 14 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 logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus synthesis and Joules RTL power solutions, as well as Modus DFT software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. 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 design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

About Riskified

Riskified Ltd., together with its subsidiaries, develops and offers an e-commerce risk management platform that allows online merchants to create trusted relationships with consumers in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and the Americas. It offers Chargeback Guarantee that ensures the legitimacy of merchants' online orders; Policy Protect, a machine learning solution designed to detect and prevent refund and returns policy abuse in real-time; Account Secure, a solution that cross-checks every login attempt; Dispute Resolve, which is used to compile submissions for fraud and non-fraud related chargeback issues; and PSD2 Optimize that helps merchants avoid bank authorization failures and abandoned shopping carts. The company serves direct-to-consumer brands, online-only retailers, omnichannel retailers, online marketplaces, and e-commerce service providers in various industries, such as payments, money transfer and crypto, tickets and travel, electronics, home, and fashion and luxury goods. Riskified Ltd. was incorporated in 2012 and is headquartered in Tel Aviv, Israel.