Financial Analysis: Citrix Systems (CTXS) and Synopsys (SNPS)

Citrix Systems (NASDAQ: CTXS) and Synopsys (NASDAQ:SNPS) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

94.4% of Citrix Systems shares are held by institutional investors. Comparatively, 89.8% of Synopsys shares are held by institutional investors. 0.4% of Citrix 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Citrix Systems and Synopsys’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citrix Systems $3.42 billion 3.84 $536.11 million $2.95 29.50
Synopsys $2.72 billion 4.94 $136.56 million $0.85 105.36

Citrix Systems has higher revenue and earnings than Synopsys. Citrix Systems is trading at a lower price-to-earnings ratio than Synopsys, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Citrix Systems has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Citrix Systems and Synopsys, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citrix Systems 1 7 8 0 2.44
Synopsys 0 1 7 0 2.88

Citrix Systems currently has a consensus price target of $89.50, indicating a potential upside of 2.85%. Synopsys has a consensus price target of $99.14, indicating a potential upside of 10.70%. Given Synopsys’ stronger consensus rating and higher possible upside, analysts clearly believe Synopsys is more favorable than Citrix Systems.

Profitability

This table compares Citrix Systems and Synopsys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citrix Systems 15.67% 31.32% 11.35%
Synopsys 5.01% 5.78% 3.55%

Summary

Citrix Systems beats Synopsys on 9 of the 14 factors compared between the two stocks.

Citrix Systems Company Profile

Citrix Systems, Inc. offers Enterprise and Service Provider products, which include Workspace Services solutions and Delivery Networking products. The Company’s Enterprise and Service Provider products include Cloud Services solutions, and related license updates and maintenance, support and professional services. The Company’s NetScaler nCore Technology is an architecture that enables execution of multiple packet engines in parallel. The Company’s workspace services include Application Virtualization and virtual desktop infrastructure (VDI), Enterprise Mobility Management and Citrix Workspace Suite. The Company’s NetScaler ADC is a software-defined application delivery controller (ADC) and load balancer. The Company’s Cloud Services include ShareFile and Citrix Cloud. It provides various ways for customers to receive upgrades, support and maintenance for products, which include Software Maintenance, Subscription Advantage, Technical Support Services and Hardware Maintenance.

Synopsys Company Profile

Synopsys, Inc. provides software, intellectual property (IP) and services. The Company supplies the electronic design automation (EDA) software that engineers use to design and test integrated circuits, also known as chips. It also offers IP products, which are pre-designed circuits that engineers use as components of larger chip designs rather than designing those circuits themselves. It provides software and hardware used to develop the electronic systems that incorporate chips and the software that runs on them. It provides technical services to support its solutions and help its customers develop chips and electronic systems. It is also a provider of software tools that developers use to develop software code in a range of industries, including electronics, financial services, energy, and industrials. It offers products and services in four categories: core EDA; IP, Systems and Software Integrity; Manufacturing Solutions, and Professional Services and Other.

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