Dropbox (NASDAQ:DBX) and Cadence Design Systems (NASDAQ:CDNS) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.
Volatility & Risk
Dropbox has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Cadence Design Systems has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.
This table compares Dropbox and Cadence Design Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cadence Design Systems||17.91%||30.86%||16.03%|
Earnings & Valuation
This table compares Dropbox and Cadence Design Systems’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dropbox||$1.39 billion||8.72||-$484.90 million||($1.31)||-19.75|
|Cadence Design Systems||$2.14 billion||9.86||$345.78 million||$1.23||60.99|
Cadence Design Systems has higher revenue and earnings than Dropbox. Dropbox 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
28.7% of Dropbox shares are owned by institutional investors. Comparatively, 87.2% of Cadence Design Systems shares are owned by institutional investors. 31.2% of Dropbox shares are owned by insiders. Comparatively, 2.3% of Cadence Design Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of current ratings and recommmendations for Dropbox and Cadence Design Systems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cadence Design Systems||0||5||5||0||2.50|
Dropbox currently has a consensus price target of $32.50, indicating a potential upside of 25.63%. Cadence Design Systems has a consensus price target of $59.00, indicating a potential downside of 21.35%. Given Dropbox’s stronger consensus rating and higher possible upside, equities analysts plainly believe Dropbox is more favorable than Cadence Design Systems.
Cadence Design Systems beats Dropbox on 9 of the 14 factors compared between the two stocks.
Dropbox, Inc. provides a collaboration platform worldwide. Its platform allows individuals, teams, and organizations to collaborate and sign up for free through its Website or app, as well as upgrade to a paid subscription plan for premium features. The company has approximately 500 million registered users across 180 countries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was founded in 2007 and is headquartered in San Francisco, California.
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 simulation platform; Palladium Z1, an enterprise emulation platform; and Protium S1 field-programmable gate array prototyping platform. The company also provides digital IC design products, such as logic design products for chip planning, design, verification, and test technologies and services; physical implementation tools, including place and route, signal integrity, optimization, and multiple patterning preparation; and signoff products to signoff the design as ready for manufacture by a silicon foundry, as well as design for manufacturing products for use in the product development process. 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 interconnect design products to develop printed circuit boards and IC packages. Further, the company provides design intellectual property (IP) products consisting of pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP and memory models for use in system-level verification to model correct behavior of full systems interacting with their environments. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. Cadence Design Systems, Inc. was founded in 1988 and is headquartered in San Jose, California.
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