Analyzing Synopsys (NASDAQ:SNPS) and Domo (NASDAQ:DOMO)

Synopsys (NASDAQ:SNPS) and Domo (NASDAQ:DOMO) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Valuation & Earnings

This table compares Synopsys and Domo’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$5.08 billion	16.11	$984.59 million	$6.67	80.71
Domo	$308.64 million	1.09	-$105.55 million	($2.40)	-3.90

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

Profitability

This table compares Synopsys and Domo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synopsys	18.71%	18.01%	10.69%
Domo	-26.43%	N/A	-36.79%

Institutional and Insider Ownership

84.1% of Synopsys shares are held by institutional investors. Comparatively, 65.0% of Domo shares are held by institutional investors. 0.7% of Synopsys shares are held by company insiders. Comparatively, 12.8% of Domo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Synopsys has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Domo has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Synopsys and Domo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	0	1	11	0	2.92
Domo	0	3	2	0	2.40

Synopsys presently has a consensus price target of $506.45, indicating a potential downside of 5.92%. Domo has a consensus price target of $17.86, indicating a potential upside of 90.78%. Given Domo’s higher possible upside, analysts clearly believe Domo is more favorable than Synopsys.

Summary

Synopsys beats Domo on 11 of the 14 factors compared between the two stocks.

About Synopsys

Synopsys, Inc. provides electronic design automation software products used to design and test integrated circuits. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. It also provides intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, MIPI, HDMI, and Bluetooth low energy applications; logic libraries and embedded memories; processor cores, software, and application-specific instruction-set processor tools for embedded applications; security IP solutions; IP solutions for automotive market; and system-on-chip (SoC) infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating-point components, and Arm AMBA interconnect fabric and peripherals. In addition, the company offers HAPS FPGA-based prototyping systems; virtual prototyping solutions; and Platform Architect solutions for SoC architecture analysis and optimization, as well as a series of tools used in the design of optical systems and photonic devices. Further, it provides security testing, managed services, programs and professional services, and training that enable its customers to detect and remediate security vulnerabilities, and defects in the software development lifecycle, as well as manufacturing solutions. The company serves electronics, financial services, automotive, medicine, energy, and industrial areas. It has a strategic partnership with Intel Corporation to develop EDA and IP solutions. Synopsys, Inc. was incorporated in 1986 and is headquartered in Mountain View, California.

About Domo

Domo, Inc. operates a cloud-based business intelligence platform in North America, Western Europe, Canada, Australia, and Japan. Its platform digitally connects from the chief executive officer to the frontline employee with the various people, data, and systems in an organization, as well as giving them access to real-time data and insights, and allowing them to manage business from smartphones. The company was formerly known as Domo Technologies, Inc. and changed its name to Domo, Inc. in December 2011. Domo, Inc. was incorporated in 2010 and is headquartered in American Fork, Utah.