Twilio (TWLO) vs. Synopsys (SNPS) Head-To-Head Analysis

Twilio (NYSE: TWLO) and Synopsys (NASDAQ:SNPS) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Twilio and Synopsys, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Twilio 1 1 17 0 2.84
Synopsys 1 0 5 0 2.67

Twilio presently has a consensus target price of $46.40, suggesting a potential downside of 17.17%. Synopsys has a consensus target price of $104.33, suggesting a potential upside of 21.93%. Given Synopsys’ higher probable upside, analysts clearly believe Synopsys is more favorable than Twilio.

Profitability

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

Net Margins Return on Equity Return on Assets
Twilio -16.61% -21.88% -17.31%
Synopsys 3.25% 6.55% 3.81%

Institutional and Insider Ownership

62.1% of Twilio shares are owned by institutional investors. Comparatively, 88.5% of Synopsys shares are owned by institutional investors. 19.8% of Twilio shares are owned by insiders. Comparatively, 1.8% of Synopsys shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Twilio has a beta of -0.27, suggesting that its share price is 127% less volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Earnings and Valuation

This table compares Twilio and Synopsys’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Twilio $399.02 million 13.45 -$63.70 million ($0.78) -71.82
Synopsys $2.72 billion 4.68 $136.56 million $0.88 97.24

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

Summary

Synopsys beats Twilio on 10 of the 14 factors compared between the two stocks.

About Twilio

Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications in the United States and internationally. The company's programmable communications cloud provides a set of application programming interfaces that enable developers to embed voice, messaging, and video capabilities into their applications. Twilio Inc. was founded in 2008 and is headquartered in San Francisco, California.

About Synopsys

Synopsys, Inc. provides electronic design automation (EDA) software products used to design and test integrated circuits (ICs). It offers Galaxy Design platform that offers IC design solutions; 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 DesignWare 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 for creating virtual prototypes and virtualizers; and HAPS 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 services and others. The company has a collaboration agreement with Arm. Synopsys, Inc. was founded in 1986 and is headquartered in Mountain View, California.

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