Cadence Design Systems (NASDAQ:CDNS – Get Free Report) is one of 954 publicly-traded companies in the “Software” industry, but how does it contrast to its peers? We will compare Cadence Design Systems to similar companies based on the strength of its profitability, dividends, risk, valuation, earnings, institutional ownership and analyst recommendations.
Profitability
This table compares Cadence Design Systems and its peers’ 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% |
Volatility & Risk
Cadence Design Systems has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Cadence Design Systems’ peers have a beta of 1.34, suggesting that their average stock price is 34% more volatile than the S&P 500.
Insider & Institutional 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 company insiders. Comparatively, 19.9% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Cadence Design Systems and its peers top-line revenue, earnings per share 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 peers. Cadence Design Systems is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Cadence Design Systems and its peers, as provided by MarketBeat.
| 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 currently has a consensus price target 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’ peers higher probable upside, analysts clearly believe Cadence Design Systems has less favorable growth aspects than its peers.
Summary
Cadence Design Systems beats its peers on 8 of the 13 factors compared.
About Cadence Design Systems
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.
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