Cadence Design Systems (NASDAQ:CDNS) and Workday (NASDAQ:WDAY) are both large-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.
Profitability
This table compares Cadence Design Systems and Workday's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Cadence Design Systems | 42.68% | 48.31% | 28.21% |
| Workday | -10.77% | -10.56% | -3.90% |
Earnings & Valuation
This table compares Cadence Design Systems and Workday's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Cadence Design Systems | $2.34 billion | 15.13 | $988.98 million | $3.53 | 35.89 |
| Workday | $3.63 billion | 15.68 | $-480,670,000.00 | ($1.42) | -166.92 |
Cadence Design Systems has higher earnings, but lower revenue than Workday. Workday 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.
Analyst Recommendations
This is a summary of current recommendations and price targets for Cadence Design Systems and Workday, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Cadence Design Systems | 1 | 2 | 9 | 0 | 2.67 |
| Workday | 1 | 9 | 19 | 0 | 2.62 |
Cadence Design Systems presently has a consensus target price of $140.9167, suggesting a potential upside of 11.23%. Workday has a consensus target price of $262.2963, suggesting a potential upside of 10.66%. Given Cadence Design Systems' stronger consensus rating and higher probable upside, research analysts clearly believe Cadence Design Systems is more favorable than Workday.
Volatility and Risk
Cadence Design Systems has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Workday has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500.
Insider and Institutional Ownership
83.9% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 68.0% of Workday shares are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by insiders. Comparatively, 26.5% of Workday shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Cadence Design Systems beats Workday on 9 of the 14 factors compared between the two stocks.
