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SNPS or CDNS: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Computer - Software sector might want to consider either Synopsys (SNPS - Free Report) or Cadence Design Systems (CDNS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Synopsys is sporting a Zacks Rank of #2 (Buy), while Cadence Design Systems has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SNPS is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SNPS currently has a forward P/E ratio of 32.48, while CDNS has a forward P/E of 36.56. We also note that SNPS has a PEG ratio of 2.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CDNS currently has a PEG ratio of 2.06.
Another notable valuation metric for SNPS is its P/B ratio of 7.84. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CDNS has a P/B of 15.71.
These metrics, and several others, help SNPS earn a Value grade of B, while CDNS has been given a Value grade of D.
SNPS has seen stronger estimate revision activity and sports more attractive valuation metrics than CDNS, so it seems like value investors will conclude that SNPS is the superior option right now.
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SNPS or CDNS: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Computer - Software sector might want to consider either Synopsys (SNPS - Free Report) or Cadence Design Systems (CDNS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Synopsys is sporting a Zacks Rank of #2 (Buy), while Cadence Design Systems has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SNPS is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SNPS currently has a forward P/E ratio of 32.48, while CDNS has a forward P/E of 36.56. We also note that SNPS has a PEG ratio of 2.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CDNS currently has a PEG ratio of 2.06.
Another notable valuation metric for SNPS is its P/B ratio of 7.84. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CDNS has a P/B of 15.71.
These metrics, and several others, help SNPS earn a Value grade of B, while CDNS has been given a Value grade of D.
SNPS has seen stronger estimate revision activity and sports more attractive valuation metrics than CDNS, so it seems like value investors will conclude that SNPS is the superior option right now.