Cadence Design Systems (NASDAQ: CDNS) is one of 114 public companies in the “Software” industry, but how does it compare to its competitors? We will compare Cadence Design Systems to related businesses based on the strength of its analyst recommendations, valuation, dividends, earnings, risk, profitability and institutional ownership.

Volatility & Risk

Cadence Design Systems has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Cadence Design Systems’ competitors have a beta of 0.98, indicating that their average stock price is 2% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Cadence Design Systems and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Design Systems 1 1 3 0 2.40
Cadence Design Systems Competitors 388 2290 4340 114 2.59

Cadence Design Systems currently has a consensus target price of $32.00, indicating a potential downside of 16.38%. As a group, “Software” companies have a potential upside of 11.53%. Given Cadence Design Systems’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Cadence Design Systems has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares Cadence Design Systems and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Cadence Design Systems $1.87 billion $421.11 million 43.99
Cadence Design Systems Competitors $1.54 billion $453.42 million 43.41

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

Profitability

This table compares Cadence Design Systems and its competitors’ 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 -39.00% -44.02% -9.67%

Insider & Institutional Ownership

84.3% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 58.1% of shares of all “Software” companies are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

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

Cadence Design Systems Company Profile

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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