314.91 USD
-0.19 (-0.06%)
315.91 USD
+1 (+0.32%)
We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 281 industry peers in the Software industry. While CDNS has a great profitability rating, there are some minor concerns on its financial health. CDNS shows excellent growth, but is valued quite expensive already. With these ratings, CDNS could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
CDNS had positive earnings in the past year.
CDNS had a positive operating cash flow in the past year.
In the past 5 years CDNS has always been profitable.
CDNS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.05%, CDNS belongs to the top of the industry, outperforming 87.19% of the companies in the same industry.
Looking at the Return On Equity, with a value of 20.41%, CDNS belongs to the top of the industry, outperforming 88.61% of the companies in the same industry.
The Return On Invested Capital of CDNS (15.75%) is better than 92.88% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CDNS is significantly above the industry average of 10.73%.
The last Return On Invested Capital (15.75%) for CDNS is well below the 3 year average (20.16%), which needs to be investigated, but indicates that CDNS had better years and this may not be a problem.
| 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
Looking at the Profit Margin, with a value of 20.35%, CDNS belongs to the top of the industry, outperforming 85.41% of the companies in the same industry.
In the last couple of years the Profit Margin of CDNS has declined.
With an excellent Operating Margin value of 31.57%, CDNS belongs to the best of the industry, outperforming 93.24% of the companies in the same industry.
In the last couple of years the Operating Margin of CDNS has grown nicely.
CDNS has a better Gross Margin (85.55%) than 93.24% of its industry peers.
In the last couple of years the Gross Margin of CDNS has remained more or less at the same level.
| 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.
The number of shares outstanding for CDNS has been reduced compared to 5 years ago.
CDNS has a worse debt/assets ratio than last year.
2.2 Solvency
CDNS has a debt to FCF ratio of 1.68. This is a very positive value and a sign of high solvency as it would only need 1.68 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.68, CDNS is in the better half of the industry, outperforming 70.46% of the companies in the same industry.
CDNS has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.48, CDNS is doing worse than 64.41% 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/WACC1.45
WACC10.83%
2.3 Liquidity
CDNS has a Current Ratio of 3.05. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
CDNS's Current ratio of 3.05 is fine compared to the rest of the industry. CDNS outperforms 76.16% of its industry peers.
A Quick Ratio of 2.84 indicates that CDNS has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.84, CDNS is doing good in the industry, outperforming 75.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.52% over the past year.
CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.21% yearly.
CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.72%.
The Revenue has been growing by 14.72% on average over the past years. This is quite good.
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
Based on estimates for the next years, CDNS will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.14% on average per year.
The Revenue is expected to grow by 11.93% on average over the next years. This is quite good.
EPS Next Y20.43%
EPS Next 2Y17.23%
EPS Next 3Y16.54%
EPS Next 5Y13.14%
Revenue Next Year13.94%
Revenue Next 2Y13.23%
Revenue Next 3Y13.03%
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
CDNS is valuated quite expensively with a Price/Earnings ratio of 44.80.
CDNS's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of CDNS to the average of the S&P500 Index (26.38), we can say CDNS is valued expensively.
A Price/Forward Earnings ratio of 38.38 indicates a quite expensive valuation of CDNS.
The rest of the industry has a similar Price/Forward Earnings ratio as CDNS.
CDNS's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.8 | ||
| Fwd PE | 38.38 |
4.2 Price Multiples
CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 63.35% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.97 | ||
| EV/EBITDA | 45.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CDNS does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of CDNS may justify a higher PE ratio.
CDNS's earnings are expected to grow with 16.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.19
PEG (5Y)2.02
EPS Next 2Y17.23%
EPS Next 3Y16.54%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
314.91
-0.19 (-0.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.78%
Inst Owner Change0.97%
Ins Owners0.25%
Ins Owner Change-1.81%
Market Cap85.72B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts80.63
Price Target391.59 (24.35%)
Short Float %1.62%
Short Ratio2.49
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)2.21%
PT rev (3m)4.15%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)-0.1%
EPS NY rev (1m)0.21%
EPS NY rev (3m)1.83%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.8 | ||
| Fwd PE | 38.38 | ||
| P/S | 16.44 | ||
| P/FCF | 57.97 | ||
| P/OCF | 53.02 | ||
| P/B | 16.49 | ||
| P/tB | 45.56 | ||
| EV/EBITDA | 45.85 |
EPS(TTM)7.03
EY2.23%
EPS(NY)8.2
Fwd EY2.61%
FCF(TTM)5.43
FCFY1.72%
OCF(TTM)5.94
OCFY1.89%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.19
PEG (5Y)2.02
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
WACC10.83%
ROIC/WACC1.45
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 2Y17.23%
EPS Next 3Y16.54%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.94%
Revenue Next 2Y13.23%
Revenue Next 3Y13.03%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year25.41%
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 of CADENCE DESIGN SYS INC (CDNS) stock?
ChartMill assigns a valuation rating of 3 / 10 to CADENCE DESIGN SYS INC (CDNS). This can be considered as Overvalued.
What is the profitability of CDNS stock?
CADENCE DESIGN SYS INC (CDNS) has a profitability rating of 9 / 10.
What is the financial health of CADENCE DESIGN SYS INC (CDNS) stock?
The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 6 / 10.
Can you provide the expected EPS growth for CDNS stock?
The Earnings per Share (EPS) of CADENCE DESIGN SYS INC (CDNS) is expected to grow by 20.43% in the next year.