Synopsys (NASDAQ:SNPS) versus nCino (NASDAQ:NCNO) Critical Contrast

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
nCino	$476.54 million	7.96	-$42.35 million	($0.17)	-192.69
Synopsys	$6.13 billion	13.22	$2.26 billion	$14.52	36.08

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

Analyst Recommendations

This is a breakdown of current ratings for nCino and Synopsys, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
nCino	0	4	11	0	2.73
Synopsys	0	1	10	0	2.91

nCino currently has a consensus target price of $42.50, indicating a potential upside of 29.73%. Synopsys has a consensus target price of $641.82, indicating a potential upside of 22.51%. Given nCino’s higher possible upside, equities analysts clearly believe nCino is more favorable than Synopsys.

Institutional & Insider Ownership

94.8% of nCino shares are held by institutional investors. Comparatively, 85.5% of Synopsys shares are held by institutional investors. 28.4% of nCino shares are held by company insiders. Comparatively, 0.7% of Synopsys shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

nCino has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Synopsys has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
nCino	-3.46%	1.62%	1.22%
Synopsys	36.12%	20.48%	13.51%

Summary

Synopsys beats nCino on 10 of the 14 factors compared between the two stocks.

About nCino

nCino, Inc., a software-as-a-service company, provides cloud-based software applications to financial institutions in the United States and internationally. Its nCino Bank Operating System connects financial institution employees, clients and third parties on a single cloud-based platform which include client onboarding, deposit account opening, loan origination, end-to-end mortgage suite, and powerful ecosystem. The company's nIQ, an application suite that utilizes data analytics and artificial intelligence and machine learning to provide its customers with automation and insights into their operations, such as tools for analyzing, measuring, and managing credit risk, as well as to enhance their ability to comply with regulatory requirements. It also offers SimpleNexus, a cloud-based mobile-first homeownership software solution. The company serves financial institution customers, including global financial institutions, enterprise banks, regional banks, community banks, credit unions, new market entrants, and independent mortgage banks through business development representatives, account executives, field sales engineers, and customer success managers. nCino, Inc. was founded in 2011 and is headquartered in Wilmington, North Carolina.

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.