Autodesk, Inc. (ADSK): The Best In Design Software For Your Tech Portfolio

ANSYS trades for a pretty lofty P/E of 25.8 times TTM earnings, with a similar projected forward growth rate as Autodesk. With $577 million in net cash on the balance sheet, ANSYS is definitely a solid company, just not as appealing as Autodesk.

Synopsys, Inc. (NASDAQ:SNPS) is another developer of design software, specializing in electronic design automation (EDA) software, which is used in the design of complex integrated circuits. So, needless to say, this is a much more specialized company with an exclusive focus on the semiconductor industry, and as such carries the added risk of being undiversified. Although the consensus calls for forward earnings growth of just about 9% annually going forward, the stock trades at a reasonable valuation of 17 times earnings, and excluding cash, the P/E is just 14.9. Not too bad, but the narrow customer base gives me hesitation here.

Buy, Sell, or Hold?

I like Autodesk, Inc. (NASDAQ:ADSK) and I think it is fairly valued right where it is. However, with the approximately 30% upward move in the past 6 months or so, I would wait until after the earnings announcement coming up soon to see if we may get a pullback that would create a better entry point.

The article The Best In Design Software For Your Tech Portfolio originally appeared on Fool.com and is written by Matthew Frankel.

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