Reviewing A10 Networks (NYSE:ATEN) & Cadence Design Systems (NASDAQ:CDNS)

A10 Networks (NYSE:ATEN) and Cadence Design Systems (NASDAQ:CDNS) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares A10 Networks and Cadence Design Systems”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
A10 Networks	$310.17 million	6.32	$42.14 million	$0.60	44.98
Cadence Design Systems	$5.30 billion	17.13	$1.11 billion	$5.03	65.50

Cadence Design Systems has higher revenue and earnings than A10 Networks. A10 Networks 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.

Insider and Institutional Ownership

98.6% of A10 Networks shares are owned by institutional investors. Comparatively, 84.8% of Cadence Design Systems shares are owned by institutional investors. 1.2% of A10 Networks shares are owned by insiders. Comparatively, 0.5% of Cadence Design Systems 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.

Profitability

This table compares A10 Networks and Cadence Design Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
A10 Networks	13.85%	23.63%	8.09%
Cadence Design Systems	23.60%	27.98%	15.35%

Volatility and Risk

A10 Networks has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Cadence Design Systems has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for A10 Networks and Cadence Design Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
A10 Networks	0	5	2	0	2.29
Cadence Design Systems	0	3	18	1	2.91

A10 Networks currently has a consensus price target of $30.88, suggesting a potential upside of 14.40%. Cadence Design Systems has a consensus price target of $404.14, suggesting a potential upside of 22.67%. Given Cadence Design Systems’ stronger consensus rating and higher probable upside, analysts plainly believe Cadence Design Systems is more favorable than A10 Networks.

Summary

Cadence Design Systems beats A10 Networks on 12 of the 14 factors compared between the two stocks.

About A10 Networks

A10 Networks, Inc. provides networking solutions in the Americas, Japan, rest of Asia Pacific, Europe, the Middle East, and Africa. The company offers Thunder Application Delivery Controller that provides advanced server load balancing; Thunder Carrier Grade Networking, which provides standards-compliant address and protocol translation services between varying types of internet protocol addresses; Thunder Secure Sockets Layer (SSL) Insight that decrypts SSL-encrypted traffic and forwards it to a third-party security device for deep packet inspection; and Thunder Convergent Firewall, which addresses multiple critical security capabilities in one package. It also provides intelligent management and automation tool comprising harmony controller that provides intelligent management, automation, and analytics for secure application delivery. In addition, the company offers A10 Defend Threat Control, a standalone SaaS platform; A10 Defend Orchestrator provides a centralized point of control for seamless distributed denial of service (DDoS) defense management and execution; A10 Defend Detector, a Netflow, Sflow, IPFIX-based DDoS detector used to easily manage the scale and heterogenous nature of SP networks; and A10 Defend Mitigator, a precision, automated, scalable, and intelligent DDoS mitigation solution. It delivers its solutions in optimized hardware appliances, bare metal software, containerized software, virtual appliances, and cloud-native software forms. The company serves cloud providers; cloud, telecommunications, and multiple system and cable service providers; government organizations; and enterprises in the telecommunications, technology, industrial, government, retail, financial, gaming, and education industries. It markets its products through sales organizations; and distribution channel partners, such as distributors, value added resellers, and system integrators. A10 Networks, Inc. was incorporated in 2004 and is headquartered in San Jose, California.

About Cadence Design Systems

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus synthesis and Joules RTL power solutions, as well as Modus DFT software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.