Comparing Cadence Design Systems (CDNS) and CommerceHub (CHUBA)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cadence Design Systems and CommerceHub, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Design Systems 0 4 2 0 2.33
CommerceHub 0 2 5 0 2.71

Cadence Design Systems currently has a consensus target price of $43.25, suggesting a potential upside of 10.44%. CommerceHub has a consensus target price of $26.60, suggesting a potential upside of 33.87%. Given CommerceHub’s stronger consensus rating and higher possible upside, analysts clearly believe CommerceHub is more favorable than Cadence Design Systems.

Insider & Institutional Ownership

84.9% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 28.3% of CommerceHub shares are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by insiders. Comparatively, 2.8% of CommerceHub shares are owned by 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 and Volatility

Cadence Design Systems has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, CommerceHub has a beta of -1.16, meaning that its share price is 216% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Cadence Design Systems 10.50% 31.28% 12.92%
CommerceHub 11.79% 34.82% 18.52%

Earnings and Valuation

This table compares Cadence Design Systems and CommerceHub’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Design Systems $1.94 billion 5.69 $204.10 million $0.73 53.64
CommerceHub $100.55 million 8.56 $9.09 million $0.28 70.96

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

Summary

CommerceHub beats Cadence Design Systems on 9 of the 14 factors compared between the two stocks.

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.

About CommerceHub

CommerceHub, Inc. is a provider of cloud-based e-commerce fulfillment and marketing solutions that integrate supply, demand and delivery for retailers and consumer brands, manufacturers and distributors. The Company’s end-to-end solutions are provided through the CommerceHub software platform, a hub that streamlines integration and enables transactions among its retailer and supplier customers and their other trading partners, while also enabling them to access the online marketplaces, search engines, social and product advertising and other digital marketing channels where consumers browse and buy. Its solutions also help its customers integrate with the third-party logistics (3PL) providers, including fulfillment and delivery providers that take purchased products to the consumer’s doorstep. The Company’s solutions include Supply Solutions, Demand Solutions and Delivery Solutions.

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