CADENCE DESIGN SYS INC (CDNS)
US1273871087 - Common Stock
Overall CDNS gets a fundamental rating of 7 out of 10. We evaluated CDNS against 279 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 expensive, but it does show an excellent growth. These ratings could make CDNS a good candidate for growth and quality 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.
Each year in the past 5 years CDNS had a positive operating cash flow.
1.2 Ratios
CDNS has a Return On Assets of 11.34%. This is amongst the best in the industry. CDNS outperforms 90.32% of its industry peers.
CDNS has a Return On Equity of 22.77%. This is amongst the best in the industry. CDNS outperforms 89.96% of its industry peers.
CDNS has a better Return On Invested Capital (13.77%) than 91.76% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 11.54%.
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 Profit Margin of 23.87%. This is amongst the best in the industry. CDNS outperforms 91.76% 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 95.34% of its industry peers.
In the last couple of years the Operating Margin of CDNS has grown nicely.
CDNS's Gross Margin of 87.79% is amongst the best of the industry. CDNS outperforms 93.91% 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.
The number of shares outstanding for CDNS has been reduced compared to 1 year ago.
CDNS has less shares outstanding than it did 5 years ago.
CDNS has a better debt/assets ratio than last year.
2.2 Solvency
CDNS has an Altman-Z score of 13.07. This indicates that CDNS is financially healthy and has little risk of bankruptcy at the moment.
CDNS has a better Altman-Z score (13.07) than 87.81% of its industry peers.
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 63.80% of the companies in the same industry.
A Debt/Equity ratio of 0.54 indicates that CDNS is somewhat dependend on debt financing.
CDNS's Debt to Equity ratio of 0.54 is on the low side compared to the rest of the industry. CDNS is outperformed by 68.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 2.97 | ||
| Altman-Z | 13.07 |
ROIC/WACC1.16
WACC11.88%
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 Current ratio of 2.45. This is in the better half of the industry: CDNS outperforms 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.
The Quick ratio of CDNS (2.27) is better than 66.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.45 | ||
| Quick Ratio | 2.27 |
3. Growth
3.1 Past
CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.64%, which is quite good.
Measured over the past years, CDNS shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.59% on average per year.
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 18.54% on average over the next years. This is quite good.
CDNS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.67% yearly.
EPS Next Y17.35%
EPS Next 2Y16.47%
EPS Next 3Y16.11%
EPS Next 5Y18.54%
Revenue Next Year13.51%
Revenue Next 2Y13.37%
Revenue Next 3Y13.06%
Revenue Next 5Y13.67%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
With a Price/Earnings ratio of 56.03, CDNS can be considered very expensive at the moment.
CDNS's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 28.96. CDNS is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 43.87, CDNS can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as CDNS.
The average S&P500 Price/Forward Earnings ratio is at 23.82. CDNS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.03 | ||
| Fwd PE | 43.87 |
4.2 Price Multiples
CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 66.67% 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 | 88.3 | ||
| EV/EBITDA | 57.98 |
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.
A more expensive valuation may be justified as CDNS's earnings are expected to grow with 16.11% in the coming years.
PEG (NY)3.23
PEG (5Y)2.48
EPS Next 2Y16.47%
EPS Next 3Y16.11%
5. Dividend
5.1 Amount
CDNS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CADENCE DESIGN SYS INC
NASDAQ:CDNS (11/21/2024, 8:00:02 PM)
Premarket: 304.97 -1.54 (-0.5%)306.51
+2.5 (+0.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap84.06B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.03 | ||
| Fwd PE | 43.87 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.23
PEG (5Y)2.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.34% | ||
| ROE | 22.77% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 29.17% | ||
| PM (TTM) | 23.87% | ||
| GM | 87.79% | ||
| 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 Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.45 | ||
| Quick Ratio | 2.27 | ||
| 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)15.64%
EPS 3Y22.67%
EPS 5Y
EPS Q2Q%
EPS Next Y17.35%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.03%
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
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y