Head to Head Review: Autodesk (NASDAQ:ADSK) vs. Synopsys (NASDAQ:SNPS)

Synopsys (NASDAQ:SNPS) and Autodesk (NASDAQ:ADSK) are both large-cap technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Synopsys and Autodesk, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	1	4	13	0	2.67
Autodesk	0	7	24	1	2.81

Synopsys currently has a consensus target price of $562.67, suggesting a potential upside of 53.02%. Autodesk has a consensus target price of $317.88, suggesting a potential upside of 40.34%. Given Synopsys’ higher possible upside, research analysts clearly believe Synopsys is more favorable than Autodesk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synopsys	11.43%	6.24%	3.95%
Autodesk	21.08%	58.63%	15.10%

Insider & Institutional Ownership

85.5% of Synopsys shares are held by institutional investors. Comparatively, 90.2% of Autodesk shares are held by institutional investors. 0.6% of Synopsys shares are held by insiders. Comparatively, 0.1% of Autodesk shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Synopsys and Autodesk”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$7.05 billion	9.99	$1.33 billion	$5.66	64.96
Autodesk	$7.79 billion	6.08	$1.12 billion	$7.73	29.30

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

Volatility and Risk

Synopsys has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, Autodesk has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Summary

Autodesk beats Synopsys on 10 of the 15 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 Autodesk

Autodesk, Inc. provides 3D design, engineering, and entertainment technology solutions worldwide. The company offers AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; BuildingConnected, a SaaS preconstruction solution; AutoCAD, a software for professional design, drafting, detailing, and visualization; AutoCAD LT, a drafting and detailing software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections tools for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment collection industries. It also provides Inventor tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; Vault, a data management software to manage data in one central location, accelerate design processes, and streamline internal/external collaboration; Maya and 3ds Max software products that offer 3D modeling, animation, effects, rendering, and compositing solutions; and ShotGrid, a cloud-based software for review and production tracking in the media and entertainment industry. It sells its products and services to customers directly, as well as through a network of resellers and distributors. Autodesk, Inc. was incorporated in 1982 and is headquartered in San Francisco, California.