312.58 USD
-3.02 (-0.96%)
313.343 USD
+0.76 (+0.24%)
We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 276 industry peers in the Software industry. CDNS has an excellent profitability rating, but there are some minor concerns on its financial health. CDNS is valued quite expensively, but it does show have an excellent growth rating. These ratings would make CDNS suitable 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.
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 (11.05%) is better than 86.59% of its industry peers.
With an excellent Return On Equity value of 20.41%, CDNS belongs to the best of the industry, outperforming 88.04% of the companies in the same industry.
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 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
The Profit Margin of CDNS (20.35%) is better than 84.42% of its industry peers.
In the last couple of years the Profit Margin of CDNS has declined.
CDNS's Operating Margin of 31.57% is amongst the best of the industry. CDNS outperforms 93.12% of its industry peers.
CDNS's Operating Margin has improved in the last couple of years.
CDNS has a Gross Margin of 85.55%. This is amongst the best in the industry. CDNS outperforms 93.12% 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
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 increased compared to 1 year ago.
The number of shares outstanding for CDNS has been reduced compared to 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 Debt to FCF ratio of 1.68. This is in the better half of the industry: CDNS outperforms 70.29% of its industry peers.
CDNS has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.48, CDNS is not doing good in the industry: 64.49% of the companies in the same industry are doing better.
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
WACC10.93%
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 Current ratio of 3.05. This is in the better half of the industry: CDNS outperforms 76.09% of its industry peers.
A Quick Ratio of 2.84 indicates that CDNS has no problem at all paying its short term obligations.
The Quick ratio of CDNS (2.84) is better than 75.00% 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.
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
The Earnings Per Share is expected to grow by 13.14% on average over the next years. This is quite good.
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 2Y17.24%
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
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
Based on the Price/Earnings ratio of 44.46, the valuation of CDNS can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of CDNS is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.51. CDNS is valued rather expensively when compared to this.
CDNS is valuated quite expensively with a Price/Forward Earnings ratio of 38.09.
CDNS's Price/Forward Earnings is on the same level as the industry average.
CDNS's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.46 | ||
| Fwd PE | 38.09 |
4.2 Price Multiples
61.96% of the companies in the same industry are more expensive than CDNS, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.54 | ||
| EV/EBITDA | 45.51 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CDNS 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)2.18
PEG (5Y)2
EPS Next 2Y17.24%
EPS Next 3Y16.29%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
312.58
-3.02 (-0.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.78%
Inst Owner Change0.99%
Ins Owners0.25%
Ins Owner Change-1.69%
Market Cap85.08B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts80.63
Price Target390.48 (24.92%)
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)0.37%
PT rev (3m)3.86%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)-0.1%
EPS NY rev (1m)0.21%
EPS NY rev (3m)1.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 44.46 | ||
| Fwd PE | 38.09 | ||
| P/S | 16.32 | ||
| P/FCF | 57.54 | ||
| P/OCF | 52.63 | ||
| P/B | 16.37 | ||
| P/tB | 45.22 | ||
| EV/EBITDA | 45.51 |
EPS(TTM)7.03
EY2.25%
EPS(NY)8.21
Fwd EY2.63%
FCF(TTM)5.43
FCFY1.74%
OCF(TTM)5.94
OCFY1.9%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.18
PEG (5Y)2
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
WACC10.93%
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.