The shares of Okta, Inc. (NASDAQ:OKTA) and Synopsys, Inc. (NASDAQ:SNPS) were among the active stocks of the last trading sessions. Okta, Inc. (NASDAQ:OKTA) declined to -4.61% closing at the price of $59.39 whereas the shares of Synopsys, Inc. (NASDAQ:SNPS) declined -1.12% with the decrease of -1 points closing at the price of $88.57. Okta, Inc. has currently increase 41.51% in its stock over the period of 6-months while its rival Synopsys, Inc. added 6.7% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Okta, Inc. (NASDAQ:OKTA) is -58.2% while the ROI of Synopsys, Inc. (NASDAQ:SNPS) is 3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, OKTA’s EBITDA Margin is -54.17 whereas SNPS’s is 25.67.
Both the profitability ratios suggest that Synopsys, Inc. (NASDAQ:SNPS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Okta, Inc. (NASDAQ:OKTA) reported $-0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.19/share Thus beating the analyst Estimates with a Surprise Factor of 21.1 Percent. While, Synopsys, Inc. (NASDAQ:SNPS) reported EPS of $0.95/share in the last quarter. The analysts projected EPS of $0.92/share depicting a Surprise of 3.3 Percent.
Taking a look at Earnings per Share, Okta, Inc. tends to be beating the analyst estimates more than Synopsys, Inc.. so OKTA is more profitable than SNPS.
Technical Analysis of Okta, Inc. & Synopsys, Inc.
Moving average convergence divergence (MACD) shows that Okta, Inc. (NASDAQ:OKTA) is on a PRICE RELATIVITY trend While Synopsys, Inc. (NASDAQ:SNPS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Okta, Inc. was in BEARISH territory and Synopsys, Inc. was in BEARISH territory.
OKTA’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While SNPS’s candle is BEARISH with HIGH.
EPS Growth Rate: OKTA’s 20% versus SNPS’s 10%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Okta, Inc. (NASDAQ:OKTA) is predicted at 20% while Synopsys, Inc. (NASDAQ:SNPS) stands at 10%. These numbers suggest that OKTA is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of OKTA stands at 2.9 while SNPS is at 0.7 whereas the debt ratio of the prior is 1.08 while the debt ratio of the later is 0.2.
The values of the both ratios suggest that OKTA is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 1.8 for OKTA and 2 for SNPS which means OKTA has Buy rating whereas SNPS has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for OKTA is $77.5 which is 23.37% of its current price while SNPS has price target of 109.57 which is 19.17% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
OKTA currently has price to earning P/E ratio of 0 whereas SNPS has 76.16 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 20.95.
The price to Book P/B for OKTA is 25.82, Price to Sale is at 18.98 and for SNPS these ratios stand at 4.16 and 4.35.