Head-To-Head Survey: Synopsys (NASDAQ:SNPS) and Kingsoft Cloud (NASDAQ:KC)

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

Risk and Volatility

Synopsys has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Kingsoft Cloud has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500.

Insider and Institutional Ownership

85.5% of Synopsys shares are owned by institutional investors. Comparatively, 13.4% of Kingsoft Cloud shares are owned by institutional investors. 0.6% of Synopsys shares are owned by company insiders. Comparatively, 14.2% of Kingsoft Cloud shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Synopsys	36.12%	20.48%	13.51%
Kingsoft Cloud	-28.41%	-19.13%	-7.90%

Analyst Recommendations

This is a breakdown of current recommendations for Synopsys and Kingsoft Cloud, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	0	1	12	0	2.92
Kingsoft Cloud	0	3	1	0	2.25

Synopsys currently has a consensus price target of $618.31, indicating a potential upside of 39.27%. Kingsoft Cloud has a consensus price target of $7.47, indicating a potential downside of 38.95%. Given Synopsys’ stronger consensus rating and higher probable upside, analysts clearly believe Synopsys is more favorable than Kingsoft Cloud.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Synopsys	$6.07 billion	11.31	$2.26 billion	$13.52	32.84
Kingsoft Cloud	$7.79 billion	0.40	-$306.53 million	($1.14)	-10.73

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

Summary

Synopsys beats Kingsoft Cloud 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. 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 Kingsoft Cloud

Kingsoft Cloud Holdings Limited provides cloud services to businesses and organizations primarily in China. The company's products portfolio includes cloud products, including infrastructure as a service (IaaS) infrastructure, platform as a service (PaaS) middleware, and software as a service (SaaS) applications that primarily consist of cloud computing, network, database, big data, security, storage, and delivery solutions. It offers research and development services, as well as enterprise digital solutions and related services. The company also provides public cloud services to customers in various verticals, including video, e-commerce, intelligent mobility, artificial intelligence, and mobile internet; and enterprise cloud services to customers in financial services, public service, and healthcare businesses. Kingsoft Cloud Holdings Limited was incorporated in 2012 and is headquartered in Beijing, the People's Republic of China.