Analyzing Cadence Design Systems (NASDAQ:CDNS) and LivePerson (NASDAQ:LPSN)
by Tristan Rich · The Markets DailyLivePerson (NASDAQ:LPSN – Get Free Report) and Cadence Design Systems (NASDAQ:CDNS – Get Free Report) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, dividends, earnings, risk and profitability.
Risk & Volatility
LivePerson has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Cadence Design Systems has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.
Institutional & Insider Ownership
79.8% of LivePerson shares are held by institutional investors. Comparatively, 84.8% of Cadence Design Systems shares are held by institutional investors. 2.0% of LivePerson shares are held by insiders. Comparatively, 0.5% 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 company is poised for long-term growth.
Valuation and Earnings
This table compares LivePerson and Cadence Design Systems”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LivePerson | $228.89 million | 0.17 | -$67.23 million | ($13.74) | -0.23 |
| Cadence Design Systems | $5.30 billion | 16.92 | $1.11 billion | $5.03 | 64.94 |
Cadence Design Systems has higher revenue and earnings than LivePerson. LivePerson 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.
Profitability
This table compares LivePerson and Cadence Design Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LivePerson | -51.89% | N/A | -8.39% |
| Cadence Design Systems | 22.51% | 26.56% | 14.70% |
Analyst Ratings
This is a breakdown of current ratings and recommmendations for LivePerson and Cadence Design Systems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LivePerson | 1 | 0 | 0 | 0 | 1.00 |
| Cadence Design Systems | 0 | 3 | 18 | 1 | 2.91 |
Cadence Design Systems has a consensus target price of $410.05, suggesting a potential upside of 25.52%. Given Cadence Design Systems’ stronger consensus rating and higher probable upside, analysts plainly believe Cadence Design Systems is more favorable than LivePerson.
Summary
Cadence Design Systems beats LivePerson on 13 of the 15 factors compared between the two stocks.
About LivePerson
LivePerson, Inc. engages in conversational artificial intelligence. It enables brands to leverage the Conversational Cloud's intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The company offers the Conversational Cloud, an enterprise-class digital customer conversation platform, which enables businesses and consumers to connect through conversational channels, such as voice, in-app, and mobile messaging. It also provides professional services; LivePerson's Conversational AI, including conversation builder, manager, and intelligence, and intent manager. In addition, it provides Voice AI, conversational intelligence and insights, and integration services. The company sells its products to Fortune 500 companies, Internet businesses, online merchants, automotive dealers, educational institution, public sector, and not-for-profit organizations. It operates in the United States, Canada, Latin America, South America, Europe, the Middle East, Africa, the United Kingdom, and the Asia-Pacific. LivePerson, Inc. was incorporated in 1995 and is headquartered in New York, New York.
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 logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus synthesis and Joules RTL power solutions, as well as Modus DFT software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. 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 design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.