Financial Contrast: Intuit (NASDAQ:INTU) versus Cadence Design Systems (NASDAQ:CDNS)

Cadence Design Systems (NASDAQ:CDNS) and Intuit (NASDAQ:INTU) are both large-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Cadence Design Systems and Intuit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Design Systems	0	3	14	0	2.82
Intuit	2	7	22	0	2.65

Cadence Design Systems currently has a consensus target price of $386.59, indicating a potential upside of 3.35%. Intuit has a consensus target price of $498.40, indicating a potential upside of 83.17%. Given Intuit’s higher probable upside, analysts plainly believe Intuit is more favorable than Cadence Design Systems.

Volatility and Risk

Cadence Design Systems has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Intuit has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Earnings & Valuation

This table compares Cadence Design Systems and Intuit”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Design Systems	$5.30 billion	19.48	$1.11 billion	$4.29	87.19
Intuit	$18.83 billion	3.95	$3.87 billion	$16.51	16.48

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

Profitability

This table compares Cadence Design Systems and Intuit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Design Systems	21.18%	28.44%	15.30%
Intuit	21.91%	25.18%	13.79%

Insider & Institutional Ownership

84.8% of Cadence Design Systems shares are held by institutional investors. Comparatively, 83.7% of Intuit shares are held by institutional investors. 0.5% of Cadence Design Systems shares are held by company insiders. Comparatively, 2.5% of Intuit shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

About Cadence Design Systems

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus synthesis and Joules RTL power solutions, as well as Modus DFT software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

About Intuit

Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in four segments: Small Business & Self-Employed, Consumer, Credit Karma, and ProTax. The Small Business & Self-Employed segment provides QuickBooks services, that includes financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing solutions, and financing for small businesses; and Mailchimp services, such as e-commerce, marketing automation, and customer relationship management. This segment also offers QuickBooks online services and desktop software solutions comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; and QuickBooks Self-Employed solution; payment-processing solutions, including credit and debit cards, Apple Pay, and ACH payment services; and financial supplies and financing for small businesses, as well as electronic filing of federal and state income tax returns. The Consumer segment provides TurboTax income tax preparation products and services. The Credit Karma segment offers consumers with a personal finance platform that provides personalized recommendations of home, auto, and personal loans, as well as credit cards and insurance products. The ProTax segment provides Lacerte, ProSeries, and ProFile desktop tax-preparation software products; and ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services. It sells products and services through various sales and distribution channels, including multi-channel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels. The company was founded in 1983 and is headquartered in Mountain View, California.