Contrasting Cadence Design Systems (NASDAQ:CDNS) & EnerNOC (ENOC)

Cadence Design Systems (NASDAQ: CDNS) and EnerNOC (NASDAQ:ENOC) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

84.8% of Cadence Design Systems shares are owned by institutional investors. Comparatively, 49.7% of EnerNOC shares are owned by institutional investors. 2.6% of Cadence Design Systems shares are owned by insiders. Comparatively, 13.4% of EnerNOC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Cadence Design Systems has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, EnerNOC has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Earnings & Valuation

This table compares Cadence Design Systems and EnerNOC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Design Systems $1.82 billion 7.01 $203.08 million $0.92 48.99
EnerNOC N/A N/A N/A ($1.50) -5.10

Cadence Design Systems has higher revenue and earnings than EnerNOC. EnerNOC 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 ratings and target prices for Cadence Design Systems and EnerNOC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Design Systems 0 3 3 0 2.50
EnerNOC 0 4 0 0 2.00

Cadence Design Systems presently has a consensus target price of $43.33, suggesting a potential downside of 3.85%. EnerNOC has a consensus target price of $8.56, suggesting a potential upside of 11.85%. Given EnerNOC’s higher probable upside, analysts clearly believe EnerNOC is more favorable than Cadence Design Systems.

Profitability

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

Net Margins Return on Equity Return on Assets
Cadence Design Systems 13.45% 29.00% 11.60%
EnerNOC -66.80% -160.15% -42.76%

Summary

Cadence Design Systems beats EnerNOC on 10 of the 12 factors compared between the two stocks.

About Cadence Design Systems

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.

About EnerNOC

EnerNOC, Inc. is a provider of energy intelligence software (EIS) and demand response solutions. The Company’s EIS provides enterprise solutions, utility solutions and energy procurement solutions. The Company’s EIS offers enterprise customers with a Software-as-a-Service (SaaS) solutions with various areas of functionalities, including energy cost visualization, budgets, forecasts and accruals; project tracking, and demand management. Its EIS provides its utility customers with a SaaS-based customer engagement platform, which collects and processes data and enables its utility customers to provide personalized communication and recommendations to their customers. Its EIS includes an energy procurement platform that helps its enterprise and utility customers. Its procurement platform offers its enterprise and utility customers with features, such as energy contracts management. Its technology includes over two components: its EIS platform and Network Operations Center (NOC).

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