Automatic Data Processing Inc (ADP)vsCadence Design Systems Inc (CDNS)
ADP
Automatic Data Processing Inc
$263.87
-3.48%
TECHNOLOGY · Cap: $97.18B
CDNS
Cadence Design Systems Inc
$332.82
+0.02%
TECHNOLOGY · Cap: $92.95B
Smart Verdict
WallStSmart Research — data-driven comparison
Automatic Data Processing Inc generates 291% more annual revenue ($21.60B vs $5.53B). CDNS leads profitability with a 21.2% profit margin vs 20.1%. ADP appears more attractively valued with a PEG of 2.30. ADP earns a higher WallStSmart Score of 66/100 (B-).
ADP
Strong Buy66
out of 100
Grade: B-
CDNS
Buy62
out of 100
Grade: C+
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-60.5%
Fair Value
$158.82
Current Price
$263.87
$105.05 premium
Intrinsic value data unavailable for CDNS.
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Every $100 of equity generates 68 in profit
Strong operational efficiency at 30.2%
Large-cap with strong market position
Keeps 20 of every $100 in revenue as profit
Generating 2.0B in free cash flow
Safe zone — low bankruptcy risk
Large-cap with strong market position
Keeps 21 of every $100 in revenue as profit
Strong operational efficiency at 29.7%
18.7% revenue growth
Earnings expanding 23.0% YoY
Areas to Watch
Expensive relative to growth rate
Trading at 16.6x book value
Distress zone — elevated risk
Trading at 14.0x book value
Expensive relative to growth rate
Premium valuation, high expectations priced in
Comparative Analysis Report
WallStSmart ResearchBull Case : ADP
The strongest argument for ADP centers on Return on Equity, Operating Margin, Market Cap. Profitability is solid with margins at 20.1% and operating margin at 30.2%.
Bull Case : CDNS
The strongest argument for CDNS centers on Altman Z-Score, Market Cap, Profit Margin. Profitability is solid with margins at 21.2% and operating margin at 29.7%. Revenue growth of 18.7% demonstrates continued momentum.
Bear Case : ADP
The primary concerns for ADP are PEG Ratio, Price/Book, Altman Z-Score.
Bear Case : CDNS
The primary concerns for CDNS are Price/Book, PEG Ratio, P/E Ratio. A P/E of 78.9x leaves little room for execution misses.
Key Dynamics to Monitor
ADP profiles as a mature stock while CDNS is a growth play — different risk/reward profiles.
CDNS carries more volatility with a beta of 1.15 — expect wider price swings.
CDNS is growing revenue faster at 18.7% — sustainability is the question.
ADP generates stronger free cash flow (2.0B), providing more financial flexibility.
Bottom Line
ADP scores higher overall (66/100 vs 62/100), backed by strong 20.1% margins. Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Automatic Data Processing Inc
TECHNOLOGY · SOFTWARE - APPLICATION · USA
Automatic Data Processing, Inc. (ADP) is an American provider of human resources management software and services.
Cadence Design Systems Inc
TECHNOLOGY · SOFTWARE - APPLICATION · USA
Cadence Design Systems, Inc., headquartered in San Jose, California, is an American multinational computational software company. The company produces software, hardware and silicon structures for designing integrated circuits, systems on chips (SoCs) and printed circuit boards.
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