CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
USA - NASDAQ:CDNS - US1273871087 - Common Stock
315.54 USD
-2.97 (-0.93%)
314.52 USD
-1.02 (-0.32%)
CDNS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 281 industry peers in the Software industry. While CDNS has a great profitability rating, there are some minor concerns on its financial health. CDNS is valued quite expensive, but it does show an excellent growth. This makes CDNS very considerable 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.
CDNS had positive earnings in each of the past 5 years.
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 87.54% of its industry peers.
The Return On Equity of CDNS (20.41%) is better than 87.90% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.75%, CDNS belongs to the top of the industry, outperforming 91.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 11.92%.
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
CDNS's Profit Margin of 20.35% is amongst the best of the industry. CDNS outperforms 85.05% of its industry peers.
In the last couple of years the Profit Margin of CDNS has declined.
CDNS has a Operating Margin of 31.57%. This is amongst the best in the industry. CDNS outperforms 93.24% of its industry peers.
CDNS's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 85.55%, 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 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
CDNS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, CDNS has more shares outstanding
CDNS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CDNS has a worse debt to assets ratio.
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.
CDNS has a Debt to FCF ratio of 1.68. This is in the better half of the industry: CDNS outperforms 70.46% of its industry peers.
A Debt/Equity ratio of 0.48 indicates that CDNS is not too dependend on debt financing.
CDNS's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. CDNS is outperformed by 63.35% 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
WACC10.91%
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 has a better Current ratio (3.05) than 77.58% 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.
The Quick ratio of CDNS (2.84) is better than 77.22% 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.
The Earnings Per Share has been growing by 22.21% on average over the past years. This is a very strong growth
Looking at the last year, CDNS shows a quite strong growth in Revenue. The Revenue has grown by 19.72% in the last year.
Measured over the past years, CDNS shows a quite strong growth in Revenue. The Revenue has been growing by 14.72% on average per year.
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.
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
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.
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
With a Price/Earnings ratio of 44.88, CDNS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of CDNS is on the same level as its industry peers.
CDNS is valuated expensively when we compare the Price/Earnings ratio to 26.34, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 38.51, CDNS can be considered very expensive at the moment.
CDNS's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 34.43. CDNS is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.88 | ||
| Fwd PE | 38.51 |
4.2 Price Multiples
CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 65.48% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CDNS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.15 | ||
| EV/EBITDA | 45.99 |
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.
CDNS's earnings are expected to grow with 16.37% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.22
PEG (5Y)2.02
EPS Next 2Y17.15%
EPS Next 3Y16.37%
5. Dividend
5.1 Amount
CDNS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
315.54
-2.97 (-0.93%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.17%
Inst Owner Change-0.09%
Ins Owners0.26%
Ins Owner Change-1.14%
Market Cap85.98B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts78.67
Price Target383.1 (21.41%)
Short Float %1.42%
Short Ratio2.34
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)1.9%
PT rev (3m)3.27%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)0.08%
EPS NY rev (1m)1.65%
EPS NY rev (3m)3.6%
Revenue NQ rev (1m)1.33%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.62%
Revenue NY rev (3m)1.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.88 | ||
| Fwd PE | 38.51 | ||
| P/S | 16.49 | ||
| P/FCF | 58.15 | ||
| P/OCF | 53.19 | ||
| P/B | 16.54 | ||
| P/tB | 45.7 | ||
| EV/EBITDA | 45.99 |
EPS(TTM)7.03
EY2.23%
EPS(NY)8.19
Fwd EY2.6%
FCF(TTM)5.43
FCFY1.72%
OCF(TTM)5.93
OCFY1.88%
SpS19.13
BVpS19.08
TBVpS6.91
PEG (NY)2.22
PEG (5Y)2.02
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
WACC10.91%
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.