Should you consider CADENCE DESIGN SYS INC (NASDAQ:CDNS) for quality investing?

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.

Exploring Why CDNS Holds Appeal for Quality Investors.

• CDNS has achieved substantial revenue growth over the past 5 years, with a 14.72% increase. This signifies the company's ability to successfully capture market opportunities and generate sustained revenue growth.
• CDNS demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 59.0% 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 2.21, CDNS 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.
• The Profit Quality (5-year) of CDNS stands at 129.0%, highlighting its ability to consistently generate reliable profits. This metric underscores the company's strong business fundamentals and reinforces its position as a financially stable entity.
• CDNS has experienced impressive EBIT growth over the past 5 years, with 22.65% increase. This reflects the company's effective operational performance and highlights its potential for long-term financial success.
• CDNS 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.

Fundamental Analysis Observations

Every day, ChartMill assigns a Fundamental Rating to each stock, providing a score ranging from 0 to 10. This rating is determined by evaluating various fundamental indicators and properties.

We assign a fundamental rating of 7 out of 10 to CDNS. CDNS was compared to 283 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 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

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.