Critical Review: Synopsys (SNPS) & Amber Road (AMBR)

Synopsys (NASDAQ: SNPS) and Amber Road (NYSE:AMBR) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for Synopsys and Amber Road, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synopsys 1 0 7 0 2.75
Amber Road 0 0 3 0 3.00

Synopsys currently has a consensus price target of $97.63, indicating a potential upside of 8.82%. Amber Road has a consensus price target of $12.00, indicating a potential upside of 60.00%. Given Amber Road’s stronger consensus rating and higher probable upside, analysts plainly believe Amber Road is more favorable than Synopsys.

Profitability

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

Net Margins Return on Equity Return on Assets
Synopsys 5.01% 5.78% 3.55%
Amber Road -20.19% -53.22% -14.53%

Earnings and Valuation

This table compares Synopsys and Amber Road’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synopsys $2.72 billion 4.90 $136.56 million $0.86 104.31
Amber Road $73.16 million 2.79 -$18.72 million ($0.57) -13.16

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

Institutional and Insider Ownership

90.8% of Synopsys shares are held by institutional investors. Comparatively, 72.6% of Amber Road shares are held by institutional investors. 1.8% of Synopsys shares are held by company insiders. Comparatively, 13.1% of Amber Road shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Synopsys has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Amber Road has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Summary

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

About Synopsys

Synopsys, Inc. provides software, intellectual property (IP) and services. The Company supplies the electronic design automation (EDA) software that engineers use to design and test integrated circuits, also known as chips. It also offers IP products, which are pre-designed circuits that engineers use as components of larger chip designs rather than designing those circuits themselves. It provides software and hardware used to develop the electronic systems that incorporate chips and the software that runs on them. It provides technical services to support its solutions and help its customers develop chips and electronic systems. It is also a provider of software tools that developers use to develop software code in a range of industries, including electronics, financial services, energy, and industrials. It offers products and services in four categories: core EDA; IP, Systems and Software Integrity; Manufacturing Solutions, and Professional Services and Other.

About Amber Road

Amber Road, Inc. is a provider of cloud-based global trade management (GTM) solutions. The Company’s GTM solutions include modules for logistics contract and rate management, supply chain visibility and event management, international trade compliance, and Global Knowledge trade content database to importers and exporters, non-vessel owning common carriers (resellers), and ocean carriers. The Company delivers its GTM solution using a software-as-a-service (SaaS) model. The Company’s solution automates the global supply chain across sourcing, logistics, cross-border trade and regulatory compliance activities. The Company’s GTM solution combines enterprise-class software, trade content sourced from government agencies and transportation providers in approximately 145 countries, and a global supply chain network connecting its customers with the trading partners, including suppliers, freight forwarders, customs brokers and transportation carriers.

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