SciQuest (NASDAQ: SQI) and Cadence Design Systems (NASDAQ:CDNS) are both technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Volatility & Risk

SciQuest has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Cadence Design Systems has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for SciQuest and Cadence Design Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SciQuest 0 0 0 0 N/A
Cadence Design Systems 0 3 3 0 2.50

Cadence Design Systems has a consensus price target of $43.33, indicating a potential downside of 4.97%. Given Cadence Design Systems’ higher probable upside, analysts plainly believe Cadence Design Systems is more favorable than SciQuest.

Valuation and Earnings

This table compares SciQuest and Cadence Design Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SciQuest N/A N/A N/A $0.11 161.32
Cadence Design Systems $1.82 billion 7.09 $203.08 million $0.93 49.03

Cadence Design Systems has higher revenue and earnings than SciQuest. Cadence Design Systems is trading at a lower price-to-earnings ratio than SciQuest, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
SciQuest 3.93% 2.23% 1.59%
Cadence Design Systems 13.45% 29.00% 11.60%

Insider & Institutional Ownership

84.8% of Cadence Design Systems shares are held by institutional investors. 2.6% of Cadence Design Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Cadence Design Systems beats SciQuest on 9 of the 11 factors compared between the two stocks.

SciQuest Company Profile

JAGGAER is a United States-based public provider of spend management solutions. The Company’s offers a range of solutions, such as Spend Director, Spend Radar, Sourcing Director, Advanced Sourcing Optimizer, Total Contract Manager, Total Supplier Manager, Enterprise Reagent Manager, Accounts Payable Director, Supplier Network and Portfolio Savings Manager. Its Spend Director is an e-procurement software, which allows users’ to integrate and automate processes, suppliers, compliance and workflows. Its Portfolio Savings Manager is a cloud-based savings management software that integrates project forecasting, initiative approval workflows and real-time savings. Its chemical inventory management software, Enterprise Reagent Manager (ERM), allows scientific staff in the organization to find, source and track commercial and proprietary chemicals, reagents and lab supplies. Its Total Contract Manager is a Contract Lifecycle Management solution that offers real-time updates.

Cadence Design Systems Company Profile

Cadence Design Systems, Inc. provides solutions that enable its customers to design electronic products. The Company’s product categories include Functional Verification, Digital integrated circuits (IC) Design and Signoff, Custom IC Design and Verification, System Interconnect and Analysis, and intellectual property (IP). Functional verification products are used to verify that the circuitry or the software designed will perform as intended. Digital IC design offerings are used to create representations of a digital circuit or an IC that can be verified for correctness prior to implementation. Custom IC design and verification offerings are used to create schematic and physical representations of circuits down to the transistor level for analog and memory designs. System Interconnect and Analysis offerings are used to develop printed circuit boards and IC packages. Design IP offerings consist of functional blocks, which customers integrate into their ICs for the development process.

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