306.35 USD
+2.69 (+0.89%)
306.35 USD
0 (0%)
Taking everything into account, CDNS scores 6 out of 10 in our fundamental rating. CDNS was compared to 280 industry peers in the Software industry. CDNS scores excellent on profitability, but 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.
In the past year CDNS had a positive cash flow from operations.
Each year in the past 5 years CDNS has been profitable.
CDNS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CDNS has a better Return On Assets (11.05%) than 86.43% of its industry peers.
Looking at the Return On Equity, with a value of 20.41%, CDNS belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
With an excellent Return On Invested Capital value of 15.75%, CDNS belongs to the best of the industry, outperforming 92.14% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CDNS is significantly above the industry average of 11.98%.
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
With an excellent Profit Margin value of 20.35%, CDNS belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
CDNS's Profit Margin has declined in the last couple of years.
The Operating Margin of CDNS (31.57%) is better than 93.57% of its industry peers.
CDNS's Operating Margin has improved in the last couple of years.
The Gross Margin of CDNS (85.55%) is better than 93.21% of its industry peers.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CDNS is creating value.
Compared to 1 year ago, CDNS has more shares outstanding
Compared to 5 years ago, CDNS has less shares outstanding
Compared to 1 year ago, CDNS has a worse debt to assets ratio.
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.
Looking at the Debt to FCF ratio, with a value of 1.68, CDNS is in the better half of the industry, outperforming 70.36% of the companies in the same industry.
A Debt/Equity ratio of 0.48 indicates that CDNS is not too dependend on debt financing.
The Debt to Equity ratio of CDNS (0.48) is worse than 63.93% of its industry peers.
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
WACC10.92%
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 76.79% of its industry peers.
A Quick Ratio of 2.84 indicates that CDNS has no problem at all paying its short term obligations.
CDNS's Quick ratio of 2.84 is fine compared to the rest of the industry. CDNS outperforms 76.07% of its industry peers.
| 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.
Measured over the past years, CDNS shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.21% on average per year.
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
CDNS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.14% yearly.
CDNS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.93% yearly.
EPS Next Y20.18%
EPS Next 2Y17.15%
EPS Next 3Y16.37%
EPS Next 5Y13.14%
Revenue Next Year13.92%
Revenue Next 2Y13.13%
Revenue Next 3Y12.96%
Revenue Next 5Y11.93%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 43.58, which means the current valuation is very expensive for CDNS.
CDNS's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.15, CDNS is valued quite expensively.
With a Price/Forward Earnings ratio of 37.39, CDNS can be considered very expensive at the moment.
CDNS's Price/Forward Earnings ratio is in line with the industry average.
CDNS's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 36.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.58 | ||
| Fwd PE | 37.39 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CDNS is valued a bit cheaper than the industry average as 63.93% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 56.46 | ||
| EV/EBITDA | 44.64 |
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.
CDNS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CDNS's earnings are expected to grow with 16.37% in the coming years.
PEG (NY)2.16
PEG (5Y)1.96
EPS Next 2Y17.15%
EPS Next 3Y16.37%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
306.35
+2.69 (+0.89%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.17%
Inst Owner Change0.95%
Ins Owners0.26%
Ins Owner Change-1.52%
Market Cap83.48B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts78.67
Price Target389.05 (27%)
Short Float %1.32%
Short Ratio1.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)3.48%
PT rev (3m)4.57%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-0.24%
EPS NY rev (1m)2.89%
EPS NY rev (3m)1.61%
Revenue NQ rev (1m)1.33%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.62%
Revenue NY rev (3m)0.62%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.58 | ||
| Fwd PE | 37.39 | ||
| P/S | 16.01 | ||
| P/FCF | 56.46 | ||
| P/OCF | 51.64 | ||
| P/B | 16.06 | ||
| P/tB | 44.37 | ||
| EV/EBITDA | 44.64 |
EPS(TTM)7.03
EY2.29%
EPS(NY)8.19
Fwd EY2.67%
FCF(TTM)5.43
FCFY1.77%
OCF(TTM)5.93
OCFY1.94%
SpS19.13
BVpS19.08
TBVpS6.91
PEG (NY)2.16
PEG (5Y)1.96
Graham Number54.94
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
WACC10.92%
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 Y20.18%
EPS Next 2Y17.15%
EPS Next 3Y16.37%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.92%
Revenue Next 2Y13.13%
Revenue Next 3Y12.96%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year22.62%
EBIT Next 3Y17.75%
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 20.18% in the next year.