Cadence Design Systems (NASDAQ:CDNS) & PTC (NASDAQ:PTC) Financial Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PTC	28.86%	24.63%	14.11%
Cadence Design Systems	20.93%	29.34%	15.68%

Volatility and Risk

PTC has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Cadence Design Systems has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for PTC and Cadence Design Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PTC	1	5	11	0	2.59
Cadence Design Systems	0	3	15	0	2.83

PTC currently has a consensus target price of $188.08, indicating a potential upside of 24.65%. Cadence Design Systems has a consensus target price of $376.50, indicating a potential upside of 34.56%. Given Cadence Design Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Cadence Design Systems is more favorable than PTC.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PTC	$2.74 billion	6.55	$734.00 million	$6.85	22.03
Cadence Design Systems	$5.30 billion	14.40	$1.11 billion	$4.06	68.92

Cadence Design Systems has higher revenue and earnings than PTC. PTC 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.

Institutional and Insider Ownership

95.1% of PTC shares are held by institutional investors. Comparatively, 84.9% of Cadence Design Systems shares are held by institutional investors. 0.3% of PTC shares are held by insiders. Comparatively, 0.4% of Cadence Design Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Cadence Design Systems beats PTC on 10 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 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.