Automatic Data Processing Inc (ADP)vsCadence Design Systems Inc (CDNS)
ADP
Automatic Data Processing Inc
$286.08
+0.25%
TECHNOLOGY · Cap: $113.74B
CDNS
Cadence Design Systems Inc
$342.75
+0.08%
TECHNOLOGY · Cap: $88.13B
Smart Verdict
WallStSmart Research — data-driven comparison
Automatic Data Processing Inc generates 276% more annual revenue ($21.95B vs $5.84B). CDNS leads profitability with a 23.6% profit margin vs 20.1%. CDNS appears more attractively valued with a PEG of 2.31. CDNS earns a higher WallStSmart Score of 68/100 (B-).
ADP
Buy62
out of 100
Grade: C+
CDNS
Strong Buy68
out of 100
Grade: B-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-84.1%
Fair Value
$165.18
Current Price
$286.08
$120.90 premium
Intrinsic value data unavailable for CDNS.
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Every $100 of equity generates 73 in profit
Large-cap with strong market position
Keeps 20 of every $100 in revenue as profit
Strong operational efficiency at 23.5%
Generating 1.4B in free cash flow
Earnings expanding 125.4% YoY
Safe zone — low bankruptcy risk
Large-cap with strong market position
Every $100 of equity generates 20 in profit
Keeps 24 of every $100 in revenue as profit
Strong operational efficiency at 28.6%
Areas to Watch
Expensive relative to growth rate
Moderate valuation
Trading at 18.9x book value
Weak financial health signals
Expensive relative to growth rate
Trading at 13.8x book value
Premium valuation, high expectations priced in
Comparative Analysis Report
WallStSmart ResearchBull Case : ADP
The strongest argument for ADP centers on Return on Equity, Market Cap, Profit Margin. Profitability is solid with margins at 20.1% and operating margin at 23.5%.
Bull Case : CDNS
The strongest argument for CDNS centers on EPS Growth, Altman Z-Score, Market Cap. Profitability is solid with margins at 23.6% and operating margin at 28.6%. Revenue growth of 24.2% demonstrates continued momentum.
Bear Case : ADP
The primary concerns for ADP are PEG Ratio, P/E Ratio, Price/Book.
Bear Case : CDNS
The primary concerns for CDNS are PEG Ratio, Price/Book, P/E Ratio. A P/E of 63.5x 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 1.13 — expect wider price swings.
CDNS is growing revenue faster at 24.2% — sustainability is the question.
ADP generates stronger free cash flow (1.4B), providing more financial flexibility.
Bottom Line
CDNS scores higher overall (68/100 vs 62/100), backed by strong 23.6% margins and 24.2% revenue growth. 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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