Head to Head Contrast: Cadence Design Systems (CDNS) & Exa Corporation (EXA)

Cadence Design Systems (NASDAQ: CDNS) and Exa Corporation (NASDAQ:EXA) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings for Cadence Design Systems and Exa Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Design Systems 1 1 3 0 2.40
Exa Corporation 0 4 0 0 2.00

Cadence Design Systems presently has a consensus target price of $34.00, suggesting a potential downside of 18.70%. Exa Corporation has a consensus target price of $20.63, suggesting a potential downside of 14.88%. Given Exa Corporation’s higher probable upside, analysts plainly believe Exa Corporation is more favorable than Cadence Design Systems.

Risk & Volatility

Cadence Design Systems has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Exa Corporation has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares Cadence Design Systems and Exa Corporation’s 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%
Exa Corporation -6.46% -25.19% -7.40%

Valuation & Earnings

This table compares Cadence Design Systems and Exa Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cadence Design Systems $1.87 billion 6.27 $421.11 million $0.87 48.07
Exa Corporation $72.69 million 5.01 $1.48 million ($0.32) -75.72

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

Institutional & Insider Ownership

84.3% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 75.6% of Exa Corporation shares are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by company insiders. Comparatively, 11.5% of Exa Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Cadence Design Systems beats Exa Corporation on 11 of the 13 factors compared between the two stocks.

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.

Exa Corporation Company Profile

Exa Corporation develops, sells and supports simulation software and services that manufacturers use in design and engineering processes. The Company focuses primarily on the ground transportation market, including manufacturers in the passenger vehicle, highway truck, off-highway vehicle and train markets, as well as their suppliers. Its product, PowerFLOW, is a software solution for simulating fluid flow problems, including aerodynamics, thermal management and aeroacoustics, or wind noise. PowerFLOW uses its Digital Physics technology that enables it to predict fluid flows. PowerFLOW directly simulates unpredictable turbulent scales. The PowerFLOW software suite includes the simulation engine and grid generation engine, along with pre- and post-processing software products. The software is delivered in client/server architecture, or through its cloud-based offering, ExaCLOUD. With the ExaCLOUD solution, various client features and functions are accessed through a Web browser.

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