327.31 USD
+8.51 (+2.67%)
327.5 USD
+0.19 (+0.06%)
We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 276 industry peers in the Software industry. CDNS scores excellent on profitability, but there are some minor concerns on its financial health. CDNS is valued quite expensively, but it does show have an excellent growth rating. With these ratings, CDNS could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
In the past year CDNS was profitable.
CDNS had a positive operating cash flow in the past year.
Each year in the past 5 years CDNS has been profitable.
In the past 5 years CDNS always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CDNS (11.05%) is better than 86.23% of its industry peers.
CDNS has a Return On Equity of 20.41%. This is amongst the best in the industry. CDNS outperforms 88.04% of its industry peers.
CDNS's Return On Invested Capital of 15.75% is amongst the best of the industry. CDNS outperforms 92.75% of its industry peers.
CDNS had an Average Return On Invested Capital over the past 3 years of 20.16%. This is significantly above the industry average of 10.78%.
The 3 year average ROIC (20.16%) for CDNS is well above the current ROIC(15.75%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROIC | 15.75% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
1.3 Margins
CDNS has a better Profit Margin (20.35%) than 84.42% of its industry peers.
CDNS's Profit Margin has declined in the last couple of years.
CDNS's Operating Margin of 31.57% is amongst the best of the industry. CDNS outperforms 93.12% of its industry peers.
In the last couple of years the Operating Margin of CDNS has grown nicely.
With an excellent Gross Margin value of 85.55%, CDNS belongs to the best of the industry, outperforming 93.12% of the companies in the same industry.
CDNS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% |
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CDNS is creating value.
The number of shares outstanding for CDNS has been increased compared to 1 year ago.
CDNS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CDNS is higher compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of CDNS is 1.68, which is an excellent value as it means it would take CDNS, only 1.68 years of fcf income to pay off all of its debts.
CDNS has a better Debt to FCF ratio (1.68) than 70.29% of its industry peers.
A Debt/Equity ratio of 0.48 indicates that CDNS is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.48, CDNS is doing worse than 65.22% of the companies in the same industry.
Although CDNS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | N/A |
ROIC/WACC1.44
WACC10.96%
2.3 Liquidity
A Current Ratio of 3.05 indicates that CDNS has no problem at all paying its short term obligations.
CDNS's Current ratio of 3.05 is fine compared to the rest of the industry. CDNS outperforms 75.72% of its industry peers.
CDNS has a Quick Ratio of 2.84. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.84, CDNS is doing good in the industry, outperforming 74.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.52%, which is quite impressive.
The Earnings Per Share has been growing by 22.21% on average over the past years. This is a very strong growth
CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.72%.
CDNS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.72% yearly.
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
3.2 Future
The Earnings Per Share is expected to grow by 13.14% on average over the next years. This is quite good.
Based on estimates for the next years, CDNS will show a quite strong growth in Revenue. The Revenue will grow by 11.93% on average per year.
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 46.56 indicates a quite expensive valuation of CDNS.
The rest of the industry has a similar Price/Earnings ratio as CDNS.
The average S&P500 Price/Earnings ratio is at 27.19. CDNS is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 39.88, which means the current valuation is very expensive for CDNS.
CDNS's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of CDNS to the average of the S&P500 Index (23.92), we can say CDNS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.56 | ||
| Fwd PE | 39.88 |
4.2 Price Multiples
62.68% of the companies in the same industry are more expensive than CDNS, based on the Enterprise Value to EBITDA ratio.
CDNS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.26 | ||
| EV/EBITDA | 47.66 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CDNS has an outstanding profitability rating, which may justify a higher PE ratio.
CDNS's earnings are expected to grow with 16.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.28
PEG (5Y)2.1
EPS Next 2Y17.24%
EPS Next 3Y16.29%
5. Dividend
5.1 Amount
CDNS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
327.31
+8.51 (+2.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.74%
Inst Owner Change0.27%
Ins Owners0.25%
Ins Owner Change-1.68%
Market Cap89.09B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target390.48 (19.3%)
Short Float %1.48%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.96%
Min EPS beat(2)4.06%
Max EPS beat(2)5.86%
EPS beat(4)4
Avg EPS beat(4)3.6%
Min EPS beat(4)1.28%
Max EPS beat(4)5.86%
EPS beat(8)8
Avg EPS beat(8)3.98%
EPS beat(12)12
Avg EPS beat(12)3.22%
EPS beat(16)16
Avg EPS beat(16)4.67%
Revenue beat(2)1
Avg Revenue beat(2)-0.36%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)0.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.92%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.03%
Revenue beat(8)2
Avg Revenue beat(8)-0.69%
Revenue beat(12)3
Avg Revenue beat(12)-0.68%
Revenue beat(16)7
Avg Revenue beat(16)-0.18%
PT rev (1m)-0.28%
PT rev (3m)3.86%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.1%
EPS NY rev (1m)0%
EPS NY rev (3m)1.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.56 | ||
| Fwd PE | 39.88 | ||
| P/S | 17.09 | ||
| P/FCF | 60.26 | ||
| P/OCF | 55.11 | ||
| P/B | 17.14 | ||
| P/tB | 47.35 | ||
| EV/EBITDA | 47.66 |
EPS(TTM)7.03
EY2.15%
EPS(NY)8.21
Fwd EY2.51%
FCF(TTM)5.43
FCFY1.66%
OCF(TTM)5.94
OCFY1.81%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.28
PEG (5Y)2.1
Graham Number54.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROCE | 20.09% | ||
| ROIC | 15.75% | ||
| ROICexc | 23.73% | ||
| ROICexgc | 60.82% | ||
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% | ||
| FCFM | 28.37% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
ROICexc(3y)28.2%
ROICexc(5y)26.78%
ROICexgc(3y)72.83%
ROICexgc(5y)62.51%
ROCE(3y)25.95%
ROCE(5y)24.28%
ROICexgc growth 3Y4.04%
ROICexgc growth 5Y11.48%
ROICexc growth 3Y-4.84%
ROICexc growth 5Y2.66%
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 63.33% | ||
| Cap/Sales | 2.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | 139.37% | ||
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 | ||
| Altman-Z | N/A |
F-Score7
WACC10.96%
ROIC/WACC1.44
Cap/Depr(3y)78.99%
Cap/Depr(5y)69.81%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.97%
Profit Quality(3y)119.11%
Profit Quality(5y)128.61%
High Growth Momentum
Growth
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year23.27%
EBIT Next 3Y17.85%
EBIT Next 5Y16.55%
FCF growth 1Y19.71%
FCF growth 3Y2.64%
FCF growth 5Y11.29%
OCF growth 1Y20.58%
OCF growth 3Y4.62%
OCF growth 5Y11.56%
CADENCE DESIGN SYS INC / CDNS FAQ
What is the ChartMill fundamental rating of CADENCE DESIGN SYS INC (CDNS) stock?
ChartMill assigns a fundamental rating of 6 / 10 to CDNS.
What is the valuation status for CDNS stock?
ChartMill assigns a valuation rating of 3 / 10 to CADENCE DESIGN SYS INC (CDNS). This can be considered as Overvalued.
Can you provide the profitability details for CADENCE DESIGN SYS INC?
CADENCE DESIGN SYS INC (CDNS) has a profitability rating of 9 / 10.
How financially healthy is CADENCE DESIGN SYS INC?
The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 6 / 10.