CADENCE DESIGN SYS INC (CDNS)
US1273871087 - Common Stock
Taking everything into account, CDNS scores 7 out of 10 in our fundamental rating. CDNS was compared to 284 industry peers in the Software industry. CDNS gets an excellent profitability rating and is at the same time showing great financial health properties. 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.
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.
In the past 5 years CDNS has always been profitable.
Each year in the past 5 years CDNS had a positive operating cash flow.
1.2 Ratios
The Return On Assets of CDNS (14.61%) is better than 92.23% of its industry peers.
Looking at the Return On Equity, with a value of 24.77%, CDNS belongs to the top of the industry, outperforming 90.46% of the companies in the same industry.
The Return On Invested Capital of CDNS (17.10%) is better than 92.93% of its industry peers.
CDNS had an Average Return On Invested Capital over the past 3 years of 22.10%. This is significantly above the industry average of 10.33%.
The last Return On Invested Capital (17.10%) for CDNS is well below the 3 year average (22.10%), which needs to be investigated, but indicates that CDNS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.61% | ||
| ROE | 24.77% | ||
| ROIC | 17.1% |
ROA(3y)16.92%
ROA(5y)19.03%
ROE(3y)28.97%
ROE(5y)31.53%
ROIC(3y)22.1%
ROIC(5y)19.66%
1.3 Margins
CDNS has a better Profit Margin (25.36%) than 92.93% of its industry peers.
In the last couple of years the Profit Margin of CDNS has grown nicely.
CDNS's Operating Margin of 28.81% is amongst the best of the industry. CDNS outperforms 95.76% of its industry peers.
In the last couple of years the Operating Margin of CDNS has grown nicely.
CDNS has a Gross Margin of 88.51%. This is amongst the best in the industry. CDNS outperforms 95.05% 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 | 28.81% | ||
| PM (TTM) | 25.36% | ||
| GM | 88.51% |
OM growth 3Y8.48%
OM growth 5Y10.34%
PM growth 3Y4.96%
PM growth 5Y9.5%
GM growth 3Y0.28%
GM growth 5Y0.33%
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.
The number of shares outstanding for CDNS has been reduced compared to 1 year ago.
The number of shares outstanding for CDNS has been reduced compared to 5 years ago.
CDNS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 16.19 indicates that CDNS is not in any danger for bankruptcy at the moment.
CDNS has a Altman-Z score of 16.19. This is amongst the best in the industry. CDNS outperforms 93.99% of its industry peers.
CDNS has a debt to FCF ratio of 1.43. This is a very positive value and a sign of high solvency as it would only need 1.43 years to pay back of all of its debts.
CDNS's Debt to FCF ratio of 1.43 is fine compared to the rest of the industry. CDNS outperforms 69.96% of its industry peers.
CDNS has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of CDNS (0.23) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.43 | ||
| Altman-Z | 16.19 |
ROIC/WACC1.82
WACC9.38%
2.3 Liquidity
CDNS has a Current Ratio of 1.43. This is a normal value and indicates that CDNS is financially healthy and should not expect problems in meeting its short term obligations.
CDNS has a Current ratio of 1.43. This is comparable to the rest of the industry: CDNS outperforms 44.17% of its industry peers.
A Quick Ratio of 1.32 indicates that CDNS should not have too much problems paying its short term obligations.
CDNS has a Quick ratio (1.32) which is in line with its industry peers.
The current and quick ratio evaluation for CDNS is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.36%, which is quite good.
CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.59% yearly.
The Revenue has grown by 9.49% in the past year. This is quite good.
The Revenue has been growing by 13.85% on average over the past years. This is quite good.
EPS 1Y (TTM)12.36%
EPS 3Y22.67%
EPS 5Y22.59%
EPS Q2Q%4.92%
Revenue 1Y (TTM)9.49%
Revenue growth 3Y15.09%
Revenue growth 5Y13.85%
Sales Q2Q%8.61%
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 18.54% yearly.
Based on estimates for the next years, CDNS will show a quite strong growth in Revenue. The Revenue will grow by 13.67% on average per year.
EPS Next Y16.34%
EPS Next 2Y16.95%
EPS Next 3Y18.21%
EPS Next 5Y18.54%
Revenue Next Year13.2%
Revenue Next 2Y13.47%
Revenue Next 3Y13.36%
Revenue Next 5Y13.67%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last 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 48.63.
Compared to the rest of the industry, the Price/Earnings ratio of CDNS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 29.62, CDNS is valued quite expensively.
The Price/Forward Earnings ratio is 35.14, which means the current valuation is very expensive for CDNS.
CDNS's Price/Forward Earnings is on the same level as the industry average.
CDNS is valuated expensively when we compare the Price/Forward Earnings ratio to 21.22, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.63 | ||
| Fwd PE | 35.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CDNS indicates a somewhat cheap valuation: CDNS is cheaper than 64.66% of the companies listed 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 | 71.92 | ||
| EV/EBITDA | 50.7 |
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 18.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.98
PEG (5Y)2.15
EPS Next 2Y16.95%
EPS Next 3Y18.21%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CADENCE DESIGN SYS INC
NASDAQ:CDNS (9/6/2024, 8:04:37 PM)
After market: 246.76 -0.76 (-0.31%)247.52
-3.33 (-1.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap67.78B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.63 | ||
| Fwd PE | 35.14 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.98
PEG (5Y)2.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.61% | ||
| ROE | 24.77% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 28.81% | ||
| PM (TTM) | 25.36% | ||
| GM | 88.51% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)12.36%
EPS 3Y22.67%
EPS 5Y
EPS Q2Q%
EPS Next Y16.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.49%
Revenue growth 3Y15.09%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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