Exploring CADENCE DESIGN SYS INC (NASDAQ:CDNS)s quality characteristics.

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if CADENCE DESIGN SYS INC (NASDAQ:CDNS) is suited for quality investing. Investors should of course do their own research, but we spotted CADENCE DESIGN SYS INC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

What matters for quality investors.

• The 5-year revenue growth of CADENCE DESIGN SYS INC has been remarkable, with 12.89% increase. This showcases the company's strong performance in driving revenue growth and indicates its competitiveness within the market.
• With a robust ROIC excluding cash and goodwill at 71.41%, CADENCE DESIGN SYS INC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• The Debt/Free Cash Flow Ratio of CADENCE DESIGN SYS INC stands at 0.57, reflecting the company's prudent capital structure and cash flow dynamics. This ratio highlights the company's ability to generate robust free cash flow relative to its debt obligations.
• With a robust Profit Quality (5-year) ratio of 128.0%, CADENCE DESIGN SYS INC highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
• With a robust 5-year EBIT growth of 26.35%, CADENCE DESIGN SYS INC showcases its ability to consistently expand its operating profitability. This trend indicates the company's effective cost management and revenue generation strategies.
• CADENCE DESIGN SYS INC demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

Fundamental Analysis Observations

As part of its analysis, ChartMill provides a comprehensive Fundamental Rating for each stock. This rating, ranging from 0 to 10, is updated on a daily basis and is based on the evaluation of various fundamental indicators and properties.

Overall CDNS gets a fundamental rating of 7 out of 10. We evaluated CDNS against 284 industry peers in the Software industry. CDNS gets an excellent profitability rating and is at the same time showing great financial health properties. CDNS is growing strongly while it is still valued neutral. This is a good combination! These ratings could make CDNS a good candidate for growth and quality investing.

For an up to date full fundamental analysis you can check the fundamental report of CDNS

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.