Cadence Design Systems, Inc. (CDNS) vs ServiceNow, Inc. (NOW)

Cadence Design Systems, Inc. and ServiceNow, Inc. are both Software Application companies. ServiceNow, Inc. is the larger, with a market value of $142.1B against $88.7B — 1.6× the size. Cadence Design Systems, Inc. trades at the lower P/E: 64.5× against 84.0×. ServiceNow, Inc. grew revenue faster over the last twelve months: 22.2% against 14.7%. Cadence Design Systems, Inc. has the higher net margin (23.6% vs 11.3%) and the higher return on invested capital (14.0% vs 6.83%). Across the 22 metrics below, ServiceNow, Inc. leads on 12 and Cadence Design Systems, Inc. on 10.

Valuation

Metric CDNS NOW Software Application median
P/E 64.45 84.03 24.79
P/S 15.31 9.49 2.67
P/B 13.03 11.18 3.01
Price to free cash flow 53.45 30.83 16.59
EV/EBITDA 43.38 41.74 14.40
EV/Sales 15.56 9.69 2.62
Earnings yield 1.55% 1.19% 0.00%
Free cash flow yield 1.87% 3.24% 1.91%

Profitability

Metric CDNS NOW Software Application median
Gross margin 85.87% 74.77% 67.03%
Operating margin 30.33% 11.40% 0.00%
Net margin 23.61% 11.34% 0.00%
Free cash flow margin 28.63% 31.09% 4.32%
Return on equity 23.23% 14.24% 0.00%
Return on assets 12.77% 6.22% 0.00%
Return on invested capital 14.01% 6.83% 0.00%

Growth

Metric CDNS NOW Software Application median
Revenue growth (TTM) 14.70% 22.19% 12.40%
EPS growth (last fiscal year) 5.45% 22.08% —
Revenue growth, 5-year CAGR 14.57% 24.06% 13.72%
Net income growth, 5-year CAGR 13.43% 71.16% 0.00%

Health

Metric CDNS NOW Software Application median
Debt to equity 0.36 0.60 0.02
Current ratio 1.74 0.70 1.55
Net debt to EBITDA (0.30) (1.51) 0.06

Dividend

Metric CDNS NOW Software Application median
Dividend yield 0.43% — 1.25%
Payout ratio 0.00 0.00 0.00

Size

Metric CDNS NOW Software Application median
Market cap 88.73b 142.09b 396.11m

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