Is CADENCE DESIGN SYS INC (NASDAQ:CDNS) a Strong Candidate for Quality Investing?

In this article we will dive into CADENCE DESIGN SYS INC (NASDAQ:CDNS) as a possible candidate for quality investing. Investors should always do their own research, but we noticed CADENCE DESIGN SYS INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Highlighting Notable Quality Metrics of NASDAQ:CDNS.

• CADENCE DESIGN SYS INC has achieved substantial revenue growth over the past 5 years, with a 12.89% increase. This signifies the company's ability to successfully capture market opportunities and generate sustained revenue growth.
• CADENCE DESIGN SYS INC demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 71.98% ratio. This highlights the company's efficient utilization of capital and its focus on maximizing returns for investors.
• With a favorable Debt/Free Cash Flow Ratio of 0.53, CADENCE DESIGN SYS INC showcases its sound financial discipline and cash flow management. This ratio indicates the company's ability to service its debt obligations while maintaining sufficient free cash flow for future investments or operational needs.
• 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.
• CADENCE DESIGN SYS INC has consistently achieved strong EBIT growth over the past 5 years, with a 26.35% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
• CADENCE DESIGN SYS INC has achieved impressive EBIT 5-year growth, surpassing its Revenue 5-year growth. This indicates the company's ability to improve its profitability and operational efficiency, highlighting its strong financial performance.

What else is there to say on the fundamentals of NASDAQ:CDNS?

ChartMill assigns a Fundamental Rating to every stock. This score, ranging from 0 to 10, is updated daily and is determined by evaluating multiple fundamental indicators and properties.

Taking everything into account, CDNS scores 7 out of 10 in our fundamental rating. CDNS was compared to 279 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 not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make CDNS suitable for growth and quality investing!

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

More quality stocks can be found in our Caviar Cruise screen.

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.