ADP vs Cadence

ADP and Cadence Design Systems Inc. are compared here to illuminate their business models, financial performance, and market context. This page provides a neutral overview of how each company operates, where revenue comes from, and how they position themselves within their industries. Educational content, not financial advice.

ADP and Cadence Design Systems Inc. are compared here to illuminate their business models, financial performance, and market context. This page provides a neutral overview of how each company operates...

Comparison Snapshot

Key Financial Metrics

ADP

Metric

CDNS

$99.68B

Market Cap

$78.72B

15.12%

Potential Profit

32.76%

Hold

Analyst Rating

Buy

Why It's Moving

ADP Powers Ahead with Q2 Earnings Beat and AI-Driven Outlook Boost

Launched ADP Assist AI agents for payroll, HR, analytics, and tax, leveraging global data to tackle real workforce issues and win new deals.
Raised FY26 EPS guidance to $10.09-$11.01 above street expectations, ES revenue growth to 6%, and net investment impact by $10 million to $1.27-$1.29 billion.
Board approved $6 billion share buyback while PEO revenue grew 6%, highlighting solid new business bookings and margin gains from operating leverage.

Sentiment:

🐃Bullish

Institutional investors pile into Cadence Design Systems amid analyst optimism ahead of earnings.

Principal Financial Group boosted its CDNS holdings on February 1, while Arjuna Capital surged its stake by 404.8% to $1.63 million as of February 2, reflecting strong institutional interest.
Wall Street maintains a 'Moderate Buy' consensus from 13 Buy and 4 Hold ratings, with an average price target of $379.59 versus recent levels near $296.
Upcoming Q4 earnings on February 17 project $1.90 EPS and $1.42 billion revenue, building on Cadence's streak of beating estimates in the last four quarters.

Sentiment:

🐃Bullish

ADP Powers Ahead with Q2 Earnings Beat and AI-Driven Outlook Boost

Launched ADP Assist AI agents for payroll, HR, analytics, and tax, leveraging global data to tackle real workforce issues and win new deals.
Raised FY26 EPS guidance to $10.09-$11.01 above street expectations, ES revenue growth to 6%, and net investment impact by $10 million to $1.27-$1.29 billion.
Board approved $6 billion share buyback while PEO revenue grew 6%, highlighting solid new business bookings and margin gains from operating leverage.

Sentiment:

🐃Bullish

Institutional investors pile into Cadence Design Systems amid analyst optimism ahead of earnings.

Principal Financial Group boosted its CDNS holdings on February 1, while Arjuna Capital surged its stake by 404.8% to $1.63 million as of February 2, reflecting strong institutional interest.
Wall Street maintains a 'Moderate Buy' consensus from 13 Buy and 4 Hold ratings, with an average price target of $379.59 versus recent levels near $296.
Upcoming Q4 earnings on February 17 project $1.90 EPS and $1.42 billion revenue, building on Cadence's streak of beating estimates in the last four quarters.

Sentiment:

🐃Bullish

Investment Analysis

ADP

Pros

ADP's 2025 revenue rose 7.07% to $20.56 billion, reflecting solid top-line growth in its human capital management business.
The company has a strong market presence as a global leader in HR technology and business process outsourcing with a large, diverse client base.
ADP's valuation metrics indicate it is undervalued on a forward PE ratio basis compared to historical averages and industry peers.

Considerations

ADP's stock price declined about 10% in 2025 amid broad tech volatility and sector rotation, indicating some investor caution or market headwinds.
The forward free cash flow yield is significantly lower than its 3- and 5-year averages, suggesting weaker cash generation or capital efficiency recently.
Analyst consensus is a 'Hold' rating with a moderate average price target upside, indicating tempered growth expectations and lack of strong buy signals.

Cadence

CDNS

Pros

Cadence Design Systems is a major player in electronic design automation, benefiting from increased demand in semiconductor and tech industries.
The company has strong recurring revenue streams and benefits from multi-year design wins with leading chip manufacturers.
Cadence’s focus on AI-driven design tools positions it well in growing markets such as AI, automotive, and 5G technology.

Considerations

Cadence faces intense competition from other design automation providers, which could pressure pricing and margins.
Its business is sensitive to cyclicality in semiconductor capital expenditures and broader tech spending cycles.
Execution risks persist given the complexity of innovation-driven growth and rapid technology changes in its core markets.

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