Contrasting Cadence Design Systems (CDNS) and Its Peers

Cadence Design Systems (NASDAQ:CDNS) is one of 954 publicly-traded companies in the “Software” industry, but how does it contrast to its competitors? We will compare Cadence Design Systems to similar businesses based on the strength of its valuation, profitability, institutional ownership, earnings, risk, analyst recommendations and dividends.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Cadence Design Systems	$5.30 billion	$1.11 billion	65.46
Cadence Design Systems Competitors	$1.81 billion	$385.28 million	109.05

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

Institutional and Insider Ownership

84.8% of Cadence Design Systems shares are held by institutional investors. Comparatively, 41.9% of shares of all “Software” companies are held by institutional investors. 0.5% of Cadence Design Systems shares are held by insiders. Comparatively, 19.9% of shares of all “Software” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

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	22.51%	26.56%	14.70%
Cadence Design Systems Competitors	-607.19%	26.73%	-8.88%

Analyst Recommendations

This is a summary of recent ratings and target prices 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	0	3	18	1	2.91
Cadence Design Systems Competitors	5781	21584	44977	1500	2.57

Cadence Design Systems presently has a consensus target price of $410.05, suggesting a potential upside of 24.54%. As a group, “Software” companies have a potential upside of 28.08%. Given Cadence Design Systems’ competitors higher possible upside, analysts plainly believe Cadence Design Systems has less favorable growth aspects than its competitors.

Volatility and Risk

Cadence Design Systems has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Cadence Design Systems’ competitors have a beta of 1.34, meaning that their average share price is 34% more volatile than the S&P 500.

Summary

Cadence Design Systems beats its competitors on 8 of the 13 factors compared.

Cadence Design Systems Company Profile

Cadence Design Systems, Inc. develops software, hardware and intellectual property used to design and verify semiconductors and electronic systems. Its electronic design automation (EDA) tools help customers plan, build, test and analyze complex chips and circuit boards. The company also offers semiconductor intellectual property and hardware platforms for design prototyping and verification, as well as software for system analysis, including computational fluid dynamics and electromagnetic simulation.