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.

Exploring Why NASDAQ:CDNS Holds Appeal for Quality Investors.

• Over the past 5 years, CADENCE DESIGN SYS INC has experienced impressive revenue growth, with 12.89% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• CADENCE DESIGN SYS INC exhibits a strong ROIC excluding cash and goodwill, indicating efficient capital utilization and profitable operations. The 71.98% reflects the company's ability to generate returns on invested capital and underscores its commitment to delivering value to shareholders.
• CADENCE DESIGN SYS INC demonstrates a well-balanced Debt/Free Cash Flow Ratio of 0.53, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
• With a favorable Profit Quality (5-year) ratio of 128.0%, CADENCE DESIGN SYS INC showcases its ability to consistently deliver high-quality profits. This metric signifies the company's financial strength and its capacity to generate sustainable earnings over an extended period.
• 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 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 of NASDAQ:CDNS

ChartMill utilizes a proprietary algorithm to assign a Fundamental Rating to every stock. This rating, ranging from 0 to 10, is computed daily by analyzing a variety of fundamental indicators and properties.

CDNS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 279 industry peers in the Software industry. CDNS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CDNS is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make CDNS suitable for growth and quality investing!

Check the latest full fundamental report of CDNS for a complete fundamental analysis.

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.