Should Quality Investors Include NASDAQ:CDNS in Their Portfolio?

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.

• CADENCE DESIGN SYS INC has shown strong performance in revenue growth over the past 5 years, with a 13.85% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• CADENCE DESIGN SYS INC demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 72.98% ratio. This highlights the company's efficient utilization of capital and its focus on maximizing returns for investors.
• With a Debt/Free Cash Flow Ratio of 0.54, CADENCE DESIGN SYS INC exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
• With a favorable Profit Quality (5-year) ratio of 121.0%, 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 experienced impressive EBIT growth over the past 5 years, with 25.38% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• CADENCE DESIGN SYS INC has achieved superior EBIT 5-year growth compared to its Revenue 5-year growth. This demonstrates the company's ability to maximize its profitability through effective cost management and operational strategies.

Zooming in on the fundamentals.

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

Overall CDNS gets a fundamental rating of 7 out of 10. We evaluated CDNS against 277 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 valued quite expensively, but it does show have an excellent growth rating. 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 article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.