Synopsys (NASDAQ:SNPS – Get Free Report) and Smith Micro Software (NASDAQ:SMSI – Get Free Report) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.
Institutional & Insider Ownership
85.5% of Synopsys shares are held by institutional investors. Comparatively, 20.8% of Smith Micro Software shares are held by institutional investors. 0.6% of Synopsys shares are held by company insiders. Comparatively, 29.8% of Smith Micro Software shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for Synopsys and Smith Micro Software, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Synopsys | 1 | 8 | 8 | 0 | 2.41 |
| Smith Micro Software | 1 | 0 | 0 | 0 | 1.00 |
Volatility & Risk
Synopsys has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.
Valuation and Earnings
This table compares Synopsys and Smith Micro Software”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Synopsys | $7.05 billion | 11.45 | $1.33 billion | $6.44 | 65.45 |
| Smith Micro Software | $17.36 million | 1.22 | -$29.33 million | ($1.51) | -0.54 |
Synopsys has higher revenue and earnings than Smith Micro Software. Smith Micro Software 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 Smith Micro Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Synopsys | 13.76% | 6.83% | 3.93% |
| Smith Micro Software | -168.92% | -52.96% | -41.19% |
Summary
Synopsys beats Smith Micro Software on 13 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. It operates in three segments: Design Automation, Design IP, and Software Integrity. 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 optical products, and mechatronic simulations. Further, it provides security and quality testing products, 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. Additionally, the company provides intelligent orchestration solution, software risk manager, and black duck software composition analysis tools. It serves electronics, financial services, automotive, medicine, energy, and industrial areas. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.
About Smith Micro Software
Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.
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