Cadence Design Systems (CDNS) versus Its Peers Head-To-Head Analysis

Cadence Design Systems (NASDAQ: CDNS) is one of 118 publicly-traded companies in the “Software” industry, but how does it contrast to its rivals? We will compare Cadence Design Systems to similar businesses based on the strength of its analyst recommendations, institutional ownership, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Cadence Design Systems and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Design Systems 1 1 3 0 2.40
Cadence Design Systems Competitors 264 2011 4276 84 2.63

Cadence Design Systems currently has a consensus price target of $37.00, suggesting a potential downside of 12.49%. As a group, “Software” companies have a potential upside of 4.28%. Given Cadence Design Systems’ rivals stronger consensus rating and higher possible upside, analysts plainly believe Cadence Design Systems has less favorable growth aspects than its rivals.

Valuation and Earnings

This table compares Cadence Design Systems and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Cadence Design Systems $1.87 billion $421.11 million 48.60
Cadence Design Systems Competitors $1.49 billion $438.72 million 39.74

Cadence Design Systems has higher revenue, but lower earnings than its rivals. Cadence Design Systems is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

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

Net Margins Return on Equity Return on Assets
Cadence Design Systems 12.86% 27.81% 11.00%
Cadence Design Systems Competitors -43.39% -25.11% -9.90%

Volatility and Risk

Cadence Design Systems has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Cadence Design Systems’ rivals have a beta of 0.98, indicating that their average share price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

84.2% of Cadence Design Systems shares are held by institutional investors. Comparatively, 58.4% of shares of all “Software” companies are held by institutional investors. 2.6% of Cadence Design Systems shares are held by insiders. Comparatively, 20.0% of shares of all “Software” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Cadence Design Systems rivals beat Cadence Design Systems on 7 of the 13 factors compared.

About Cadence Design Systems

Cadence Design Systems, Inc. provides solutions that enable its customers to design electronic products. The Company’s product categories include Functional Verification, Digital integrated circuits (IC) Design and Signoff, Custom IC Design and Verification, System Interconnect and Analysis, and intellectual property (IP). Functional verification products are used to verify that the circuitry or the software designed will perform as intended. Digital IC design offerings are used to create representations of a digital circuit or an IC that can be verified for correctness prior to implementation. Custom IC design and verification offerings are used to create schematic and physical representations of circuits down to the transistor level for analog and memory designs. System Interconnect and Analysis offerings are used to develop printed circuit boards and IC packages. Design IP offerings consist of functional blocks, which customers integrate into their ICs for the development process.

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