CADENCE DESIGN SYS INC (CDNS)
US1273871087 - Common Stock
CDNS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 279 industry peers in the Software industry. Both the health and profitability get an excellent rating, making CDNS a very profitable company, without any liquidiy or solvency issues. CDNS shows excellent growth, but is valued quite expensive already. These ratings would make CDNS suitable for growth and quality 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
CDNS has a better Return On Assets (11.34%) than 89.61% of its industry peers.
CDNS has a better Return On Equity (22.77%) than 88.89% of its industry peers.
CDNS has a better Return On Invested Capital (13.77%) than 91.04% 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 12.23%.
The 3 year average ROIC (22.10%) for CDNS is well above the current ROIC(13.77%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.34% | ||
| ROE | 22.77% | ||
| ROIC | 13.77% |
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 (23.87%) than 91.40% of its industry peers.
In the last couple of years the Profit Margin of CDNS has grown nicely.
CDNS has a better Operating Margin (29.17%) than 94.62% of its industry peers.
CDNS's Operating Margin has improved in the last couple of years.
CDNS has a better Gross Margin (87.79%) than 93.55% 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 | 29.17% | ||
| PM (TTM) | 23.87% | ||
| GM | 87.79% |
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.
Compared to 1 year ago, CDNS has less shares outstanding
Compared to 5 years ago, CDNS has less shares outstanding
Compared to 1 year ago, CDNS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 12.89 indicates that CDNS is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.89, CDNS belongs to the best of the industry, outperforming 86.38% of the companies in the same industry.
The Debt to FCF ratio of CDNS is 2.97, which is a good value as it means it would take CDNS, 2.97 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.97, CDNS is in the better half of the industry, outperforming 63.08% of the companies in the same industry.
CDNS has a Debt/Equity ratio of 0.54. This is a neutral value indicating CDNS is somewhat dependend on debt financing.
CDNS has a worse Debt to Equity ratio (0.54) than 69.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 12.89 |
ROIC/WACC1.17
WACC11.77%
2.3 Liquidity
CDNS has a Current Ratio of 2.45. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
CDNS has a better Current ratio (2.45) than 67.74% of its industry peers.
CDNS has a Quick Ratio of 2.27. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.27, CDNS is doing good in the industry, outperforming 66.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 2.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.64% over the past year.
CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.59% yearly.
Looking at the last year, CDNS shows a quite strong growth in Revenue. The Revenue has grown by 11.03% in the last year.
Measured over the past years, CDNS shows a quite strong growth in Revenue. The Revenue has been growing by 13.85% on average per year.
EPS 1Y (TTM)15.64%
EPS 3Y22.67%
EPS 5Y22.59%
EPS Q2Q%30.16%
Revenue 1Y (TTM)11.03%
Revenue growth 3Y15.09%
Revenue growth 5Y13.85%
Sales Q2Q%18.81%
3.2 Future
The Earnings Per Share is expected to grow by 14.31% on average over the next years. This is quite good.
Based on estimates for the next years, CDNS will show a quite strong growth in Revenue. The Revenue will grow by 13.30% on average per year.
EPS Next Y17.25%
EPS Next 2Y16.5%
EPS Next 3Y15.92%
EPS Next 5Y14.31%
Revenue Next Year13.47%
Revenue Next 2Y13.46%
Revenue Next 3Y13.04%
Revenue Next 5Y13.3%
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
CDNS is valuated quite expensively with a Price/Earnings ratio of 55.11.
CDNS's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.73. CDNS is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 43.13 indicates a quite expensive valuation of 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 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.11 | ||
| Fwd PE | 43.13 |
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 67.03% 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 | 86.85 | ||
| EV/EBITDA | 57.03 |
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 15.92% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.2
PEG (5Y)2.44
EPS Next 2Y16.5%
EPS Next 3Y15.92%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CADENCE DESIGN SYS INC
NASDAQ:CDNS (12/20/2024, 8:00:48 PM)
After market: 301.47 0 (0%)301.47
+1.6 (+0.53%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.83%
Inst Owner Change0.05%
Ins Owners0.17%
Ins Owner Change-1.6%
Market Cap82.68B
Analysts80
Price Target322.56 (7%)
Short Float %1.4%
Short Ratio1.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)7.06%
Min EPS beat(2)2.55%
Max EPS beat(2)11.57%
EPS beat(4)4
Avg EPS beat(4)4.36%
Min EPS beat(4)1.41%
Max EPS beat(4)11.57%
EPS beat(8)8
Avg EPS beat(8)3.03%
EPS beat(12)12
Avg EPS beat(12)5.02%
EPS beat(16)16
Avg EPS beat(16)5.84%
Revenue beat(2)1
Avg Revenue beat(2)0.33%
Min Revenue beat(2)-0.22%
Max Revenue beat(2)0.87%
Revenue beat(4)1
Avg Revenue beat(4)-0.46%
Min Revenue beat(4)-1.26%
Max Revenue beat(4)0.87%
Revenue beat(8)2
Avg Revenue beat(8)-0.57%
Revenue beat(12)6
Avg Revenue beat(12)0.06%
Revenue beat(16)8
Avg Revenue beat(16)0.09%
PT rev (1m)-0.04%
PT rev (3m)-2.73%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)2.52%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)0.78%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)5.78%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.11 | ||
| Fwd PE | 43.13 | ||
| P/S | 18.99 | ||
| P/FCF | 86.85 | ||
| P/OCF | 75.77 | ||
| P/B | 18.12 | ||
| P/tB | 58.74 | ||
| EV/EBITDA | 57.03 |
EPS(TTM)5.47
EY1.81%
EPS(NY)6.99
Fwd EY2.32%
FCF(TTM)3.47
FCFY1.15%
OCF(TTM)3.98
OCFY1.32%
SpS15.88
BVpS16.64
TBVpS5.13
PEG (NY)3.2
PEG (5Y)2.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.34% | ||
| ROE | 22.77% | ||
| ROCE | 16.95% | ||
| ROIC | 13.77% | ||
| ROICexc | 21.91% | ||
| ROICexgc | 66.53% | ||
| OM | 29.17% | ||
| PM (TTM) | 23.87% | ||
| GM | 87.79% | ||
| FCFM | 21.87% |
ROA(3y)16.92%
ROA(5y)19.03%
ROE(3y)28.97%
ROE(5y)31.53%
ROIC(3y)22.1%
ROIC(5y)19.66%
ROICexc(3y)30.46%
ROICexc(5y)27.16%
ROICexgc(3y)73.15%
ROICexgc(5y)59.61%
ROCE(3y)27.46%
ROCE(5y)24.35%
ROICexcg growth 3Y31%
ROICexcg growth 5Y5.15%
ROICexc growth 3Y13.79%
ROICexc growth 5Y7.14%
OM growth 3Y8.48%
OM growth 5Y10.34%
PM growth 3Y4.96%
PM growth 5Y9.5%
GM growth 3Y0.28%
GM growth 5Y0.33%
F-Score5
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 2.97 | ||
| Debt/EBITDA | 1.71 | ||
| Cap/Depr | 77.04% | ||
| Cap/Sales | 3.2% | ||
| Interest Coverage | 26.42 | ||
| Cash Conversion | 75.23% | ||
| Profit Quality | 91.61% | ||
| Current Ratio | 2.45 | ||
| Quick Ratio | 2.27 | ||
| Altman-Z | 12.89 |
F-Score5
WACC11.77%
ROIC/WACC1.17
Cap/Depr(3y)70.53%
Cap/Depr(5y)67.48%
Cap/Sales(3y)2.74%
Cap/Sales(5y)2.99%
Profit Quality(3y)133.32%
Profit Quality(5y)120.67%
High Growth Momentum
Growth
EPS 1Y (TTM)15.64%
EPS 3Y22.67%
EPS 5Y22.59%
EPS Q2Q%30.16%
EPS Next Y17.25%
EPS Next 2Y16.5%
EPS Next 3Y15.92%
EPS Next 5Y14.31%
Revenue 1Y (TTM)11.03%
Revenue growth 3Y15.09%
Revenue growth 5Y13.85%
Sales Q2Q%18.81%
Revenue Next Year13.47%
Revenue Next 2Y13.46%
Revenue Next 3Y13.04%
Revenue Next 5Y13.3%
EBIT growth 1Y11.64%
EBIT growth 3Y24.85%
EBIT growth 5Y25.62%
EBIT Next Year24.05%
EBIT Next 3Y18%
EBIT Next 5Y12.66%
FCF growth 1Y-12.66%
FCF growth 3Y15.45%
FCF growth 5Y18.07%
OCF growth 1Y-8.62%
OCF growth 3Y14.24%
OCF growth 5Y17.41%