CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
USA - NASDAQ:CDNS - US1273871087 - Common Stock
341.43 USD
+0.13 (+0.04%)
339.79 USD
-1.64 (-0.48%)
CDNS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 285 industry peers in the Software industry. CDNS scores excellent on profitability, but there are some minor concerns on its financial health. CDNS is valued quite expensively, but it does show have an excellent growth rating. This makes CDNS very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year CDNS was profitable.
In the past year CDNS had a positive cash flow from operations.
Each year in the past 5 years CDNS has been profitable.
In the past 5 years CDNS always reported a positive cash flow from operatings.
1.2 Ratios
CDNS has a Return On Assets of 11.05%. This is amongst the best in the industry. CDNS outperforms 87.37% of its industry peers.
CDNS's Return On Equity of 20.41% is amongst the best of the industry. CDNS outperforms 86.32% of its industry peers.
The Return On Invested Capital of CDNS (15.75%) is better than 91.93% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 11.88%.
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
Looking at the Profit Margin, with a value of 20.35%, CDNS belongs to the top of the industry, outperforming 85.26% of the companies in the same industry.
CDNS's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 31.57%, CDNS belongs to the best of the industry, outperforming 94.04% of the companies in the same industry.
In the last couple of years the Operating Margin of CDNS has grown nicely.
CDNS's Gross Margin of 85.55% is amongst the best of the industry. CDNS outperforms 93.33% of its industry peers.
CDNS's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CDNS is creating value.
The number of shares outstanding for CDNS has been increased compared to 1 year ago.
Compared to 5 years ago, CDNS has less shares outstanding
The debt/assets ratio for CDNS is higher compared to a year ago.
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 better Debt to FCF ratio (1.68) than 70.53% 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.
Looking at the Debt to Equity ratio, with a value of 0.48, CDNS is doing worse than 64.91% of the companies in the same industry.
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/WACC1.45
WACC10.9%
2.3 Liquidity
A Current Ratio of 3.05 indicates that CDNS has no problem at all paying its short term obligations.
CDNS has a better Current ratio (3.05) than 77.19% of its industry peers.
A Quick Ratio of 2.84 indicates that CDNS has no problem at all paying its short term obligations.
CDNS has a Quick ratio of 2.84. This is in the better half of the industry: CDNS outperforms 77.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.52%, which is quite impressive.
Measured over the past years, CDNS shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.21% on average per year.
CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.72%.
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 12.88% on average over the next years. This is quite good.
The Revenue is expected to grow by 11.65% on average over the next years. This is quite good.
EPS Next Y16.8%
EPS Next 2Y15.72%
EPS Next 3Y15.2%
EPS Next 5Y12.88%
Revenue Next Year13.22%
Revenue Next 2Y12.7%
Revenue Next 3Y12.64%
Revenue Next 5Y11.65%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 48.57, which means the current valuation is very expensive for CDNS.
The rest of the industry has a similar Price/Earnings ratio as CDNS.
When comparing the Price/Earnings ratio of CDNS to the average of the S&P500 Index (26.76), we can say CDNS is valued expensively.
With a Price/Forward Earnings ratio of 42.71, CDNS can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as CDNS.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.63, CDNS is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.57 | ||
| Fwd PE | 42.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CDNS is valued a bit cheaper than the industry average as 63.86% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 62.92 | ||
| EV/EBITDA | 49.77 |
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.
A more expensive valuation may be justified as CDNS's earnings are expected to grow with 15.20% in the coming years.
PEG (NY)2.89
PEG (5Y)2.19
EPS Next 2Y15.72%
EPS Next 3Y15.2%
5. Dividend
5.1 Amount
No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
341.43
+0.13 (+0.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners90.17%
Inst Owner Change0.21%
Ins Owners0.26%
Ins Owner Change-1.19%
Market Cap93.04B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts78.62
Price Target383.1 (12.2%)
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)0%
PT rev (3m)11.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.39%
EPS NY rev (1m)-1.21%
EPS NY rev (3m)0.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.57 | ||
| Fwd PE | 42.71 | ||
| P/S | 17.85 | ||
| P/FCF | 62.92 | ||
| P/OCF | 57.55 | ||
| P/B | 17.9 | ||
| P/tB | 49.45 | ||
| EV/EBITDA | 49.77 |
EPS(TTM)7.03
EY2.06%
EPS(NY)7.99
Fwd EY2.34%
FCF(TTM)5.43
FCFY1.59%
OCF(TTM)5.93
OCFY1.74%
SpS19.13
BVpS19.08
TBVpS6.91
PEG (NY)2.89
PEG (5Y)2.19
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
WACC10.9%
ROIC/WACC1.45
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 Y16.8%
EPS Next 2Y15.72%
EPS Next 3Y15.2%
EPS Next 5Y12.88%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.22%
Revenue Next 2Y12.7%
Revenue Next 3Y12.64%
Revenue Next 5Y11.65%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year22.62%
EBIT Next 3Y17.75%
EBIT Next 5Y13.76%
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 16.8% in the next year.