Fair Isaac (NYSE:FICO) vs. Synopsys (NASDAQ:SNPS) Financial Survey

Synopsys (NASDAQ:SNPS) and Fair Isaac (NYSE:FICO) are both large-cap technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Institutional & Insider Ownership

85.5% of Synopsys shares are held by institutional investors. Comparatively, 85.8% of Fair Isaac shares are held by institutional investors. 0.6% of Synopsys shares are held by insiders. Comparatively, 3.0% of Fair Isaac shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Synopsys has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Fair Isaac has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Synopsys and Fair Isaac, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	1	5	12	0	2.61
Fair Isaac	0	5	11	0	2.69

Synopsys currently has a consensus price target of $561.28, indicating a potential upside of 42.51%. Fair Isaac has a consensus price target of $1,553.69, indicating a potential upside of 66.77%. Given Fair Isaac’s stronger consensus rating and higher possible upside, analysts plainly believe Fair Isaac is more favorable than Synopsys.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synopsys	11.43%	6.24%	3.95%
Fair Isaac	34.05%	-32.51%	40.61%

Earnings & Valuation

This table compares Synopsys and Fair Isaac”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$7.05 billion	10.70	$1.33 billion	$5.66	69.58
Fair Isaac	$1.99 billion	10.11	$651.95 million	$34.62	26.91

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

Summary

Fair Isaac beats Synopsys on 8 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 Fair Isaac

Fair Isaac Corporation develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. It offers FICO Customer Analytics, FICO Responsible AI, FICO Advisors, FICO Business Outcome Simulator, FICO Forecaster, FICO TRIAD Customer Manager, FICO Blaze Advisor, FICO Xpress Optimization, FICO Falcon Fraud Manager, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Decision Optimizer, and FICO Strategy Director, as well as software implementation and configuration services. The company markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.