PTC (NASDAQ:PTC) versus Synopsys (NASDAQ:SNPS) Critical Contrast

PTC (NASDAQ:PTC) and Synopsys (NASDAQ:SNPS) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Institutional and Insider Ownership

95.1% of PTC shares are owned by institutional investors. Comparatively, 85.5% of Synopsys shares are owned by institutional investors. 0.3% of PTC shares are owned by insiders. Comparatively, 0.6% of Synopsys shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

PTC has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for PTC and Synopsys, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PTC	1	5	10	0	2.56
Synopsys	1	8	8	0	2.41

PTC presently has a consensus target price of $180.54, suggesting a potential upside of 32.23%. Synopsys has a consensus target price of $531.00, suggesting a potential upside of 8.58%. Given PTC’s stronger consensus rating and higher probable upside, analysts clearly believe PTC is more favorable than Synopsys.

Earnings & Valuation

This table compares PTC and Synopsys”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PTC	$2.74 billion	5.93	$734.00 million	$6.85	19.93
Synopsys	$7.05 billion	13.28	$1.33 billion	$6.44	75.93

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

Profitability

This table compares PTC and Synopsys’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PTC	28.86%	24.63%	14.11%
Synopsys	13.76%	6.83%	3.93%

Summary

PTC beats Synopsys on 8 of the 14 factors compared between the two stocks.

About PTC

PTC Inc. operates as software company in the Americas, Europe, and the Asia Pacific. The company provides Windchill, a suite that manages all aspects of the product development lifecycle(PLM) that provides real-time information sharing, dynamic data visualization, collaborate across geographically distributed teams, and enabling manufacturers to elevate product development, manufacturing, and field service processes; ThingWorx, a platform for Industrial Internet of Things; ServiceMax, a field service management solutions enable companies to asset uptime with optimized in-person and remote service and technician productivity with mobile tools. and deliver metrics; and Arena, a SaaS PLM solution enables product teams to collaborate virtually to share product and quality information with internal teams and supply chain partners and deliver products to customers. It offers Codebeamer, an application lifecycle management for products and software development; Servigistics, a service parts management solution; and FlexPLM, a solution provides retailers with a single platform for merchandising and line planning, materials management, sampling, and others. In addition, it offers Kepware, a portfolio of industrial connectivity solutions helps companies connect diverse automation devices and software applications; Creo, a 3D CAD technology enables the digital design, testing, and modification of product models; and Onshape, a cloud product development platform that delivers computer-aided design with data management tools. Further, it offers Vuforia, an augmented reality (AR) technology enables the visualization of digital information in a physical context and the creation of AR enabling companies to drive results in manufacturing, service, engineering, and operations; and Arbortext, a dynamic publishing solution streamlines how organizations create, manage, and publish technical documentation. PTC Inc. was incorporated in 1985 and is headquartered in Boston, Massachusetts.

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.