Comparing Synopsys (NASDAQ:SNPS) & The Descartes Systems Group (NASDAQ:DSGX)

Synopsys (NASDAQ:SNPS) and The Descartes Systems Group (NASDAQ:DSGX) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Risk & Volatility

Synopsys has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, The Descartes Systems Group has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Synopsys and The Descartes Systems Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	1	8	8	0	2.41
The Descartes Systems Group	0	2	8	2	3.00

Synopsys currently has a consensus target price of $531.00, suggesting a potential upside of 28.26%. The Descartes Systems Group has a consensus target price of $114.20, suggesting a potential upside of 72.38%. Given The Descartes Systems Group’s stronger consensus rating and higher probable upside, analysts plainly believe The Descartes Systems Group is more favorable than Synopsys.

Valuation and Earnings

This table compares Synopsys and The Descartes Systems Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$7.05 billion	11.24	$1.33 billion	$6.44	64.29
The Descartes Systems Group	$651.00 million	8.75	$143.27 million	$1.77	37.43

Synopsys has higher revenue and earnings than The Descartes Systems Group. The Descartes Systems Group is trading at a lower price-to-earnings ratio than Synopsys, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

85.5% of Synopsys shares are owned by institutional investors. Comparatively, 77.7% of The Descartes Systems Group shares are owned by institutional investors. 0.6% of Synopsys shares are owned by insiders. Comparatively, 0.3% of The Descartes Systems Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Synopsys and The Descartes Systems Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synopsys	13.76%	7.49%	4.11%
The Descartes Systems Group	22.10%	10.57%	8.97%

Summary

Synopsys beats The Descartes Systems Group on 8 of the 14 factors compared between the two stocks.

About Synopsys

Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. It operates in three segments: Design Automation, Design IP, and Software Integrity. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. It also provides intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, MIPI, HDMI, and Bluetooth low energy applications; logic libraries and embedded memories; processor cores, software, and application-specific instruction-set processor tools for embedded applications; security IP solutions; IP solutions for automotive market; and system-on-chip (SoC) infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating-point components, and Arm AMBA interconnect fabric and peripherals. In addition, the company offers HAPS FPGA-based prototyping systems; virtual prototyping solutions; and Platform Architect solutions for SoC architecture analysis and optimization, as well as optical products, and mechatronic simulations. Further, it provides security and quality testing products, managed services, programs and professional services, and training that enable its customers to detect and remediate security vulnerabilities, and defects in the software development lifecycle, as well as manufacturing solutions. Additionally, the company provides intelligent orchestration solution, software risk manager, and black duck software composition analysis tools. It serves electronics, financial services, automotive, medicine, energy, and industrial areas. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.

About The Descartes Systems Group

The Descartes Systems Group Inc. provides cloud-based logistics and supply chain management solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as manufacturers, retailers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.