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

$104.42B

Market Cap

$87.65B

11.98%

Potential Profit

20.59%

Hold

Analyst Rating

Buy

Why It's Moving

ADP Gears Up for Pivotal Q2 Earnings as $6B Buyback Signals Board Confidence

Board authorized $6B share repurchase on January 14, allowing buyback of 5.8% of shares to capitalize on perceived undervaluation.
Q2 earnings set for pre-market January 28, with FY2026 guidance of $10.81–$11.01 EPS amid consensus hold rating.
Earned 20th straight spot on Fortune’s Most Admired Companies list, highlighting sustained leadership in payroll and HR solutions.

Sentiment:

🐃Bullish

Cadence Design Systems Powers Ahead, Outpacing Market Amid AI Chip Design Buzz.

Recent trading showed a strong +2.23% gain to $313.84, signaling investor confidence despite modest weekly moves of 0.3%.
Analysts project Q4 EPS of $1.91 and revenue of $1.42B, up 1.06% and 5.02% year-over-year, highlighting growth in AI-driven design software.
Institutional shifts continue, with some funds trimming stakes while others boost holdings, underscoring Cadence's key position in the semiconductor ecosystem.

Sentiment:

🐃Bullish

ADP Gears Up for Pivotal Q2 Earnings as $6B Buyback Signals Board Confidence

Board authorized $6B share repurchase on January 14, allowing buyback of 5.8% of shares to capitalize on perceived undervaluation.
Q2 earnings set for pre-market January 28, with FY2026 guidance of $10.81–$11.01 EPS amid consensus hold rating.
Earned 20th straight spot on Fortune’s Most Admired Companies list, highlighting sustained leadership in payroll and HR solutions.

Sentiment:

🐃Bullish

Cadence Design Systems Powers Ahead, Outpacing Market Amid AI Chip Design Buzz.

Recent trading showed a strong +2.23% gain to $313.84, signaling investor confidence despite modest weekly moves of 0.3%.
Analysts project Q4 EPS of $1.91 and revenue of $1.42B, up 1.06% and 5.02% year-over-year, highlighting growth in AI-driven design software.
Institutional shifts continue, with some funds trimming stakes while others boost holdings, underscoring Cadence's key position in the semiconductor ecosystem.

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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