Cadence Design Systems (NASDAQ: CDNS) is one of 118 publicly-traded companies in the “Software” industry, but how does it compare to its competitors? We will compare Cadence Design Systems to related companies based on the strength of its earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

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 -43.43% -25.38% -9.99%

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, Cadence Design Systems’ competitors have a beta of 0.98, meaning that their average share price is 2% less volatile than the S&P 500.

Institutional & Insider Ownership

84.2% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 61.0% of shares of all “Software” companies are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by company insiders. Comparatively, 17.8% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

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

Gross Revenue EBITDA Price/Earnings Ratio
Cadence Design Systems $1.87 billion $421.11 million 48.25
Cadence Design Systems Competitors $1.49 billion $438.76 million 40.64

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.

Analyst Ratings

This is a summary of current ratings and price targets 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 262 2000 4261 84 2.63

Cadence Design Systems presently has a consensus price target of $34.00, suggesting a potential downside of 19.01%. As a group, “Software” companies have a potential upside of 3.92%. Given Cadence Design Systems’ competitors stronger consensus rating and higher possible upside, analysts plainly believe Cadence Design Systems has less favorable growth aspects than its competitors.

Summary

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

About Cadence Design Systems

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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