DB:CDS

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Cadence Design Systems

Executive Summary

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide.


Snowflake Analysis

Outstanding track record with flawless balance sheet.


Similar Companies

Share Price & News

How has Cadence Design Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CDS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.6%

CDS

0.06%

DE Software

2.2%

DE Market


1 Year Return

38.1%

CDS

-3.6%

DE Software

-3.9%

DE Market

Return vs Industry: CDS exceeded the German Software industry which returned -3.6% over the past year.

Return vs Market: CDS exceeded the German Market which returned -4.6% over the past year.


Shareholder returns

CDSIndustryMarket
7 Day4.6%0.06%2.2%
30 Day7.5%1.5%8.0%
90 Day23.7%-7.2%-9.6%
1 Year38.1%38.1%-2.3%-3.6%-2.3%-3.9%
3 Year155.8%155.8%21.2%16.3%-7.6%-14.8%
5 Year342.2%342.2%78.1%65.8%-0.3%-12.9%

Price Volatility Vs. Market

How volatile is Cadence Design Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Cadence Design Systems undervalued compared to its fair value and its price relative to the market?

23.7x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CDS (€79.25) is trading above our estimate of fair value (€55.17)

Significantly Below Fair Value: CDS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CDS is good value based on its PE Ratio (23.7x) compared to the Software industry average (27.7x).

PE vs Market: CDS is poor value based on its PE Ratio (23.7x) compared to the German market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: CDS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CDS is overvalued based on its PB Ratio (11.1x) compared to the DE Software industry average (3x).


Next Steps

Future Growth

How is Cadence Design Systems forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CDS's earnings are forecast to decline over the next 3 years (-3.4% per year).

Earnings vs Market: CDS's earnings are forecast to decline over the next 3 years (-3.4% per year).

High Growth Earnings: CDS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CDS's revenue (5.9% per year) is forecast to grow faster than the German market (5.7% per year).

High Growth Revenue: CDS's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CDS's Return on Equity is forecast to be high in 3 years time (23.4%)


Next Steps

Past Performance

How has Cadence Design Systems performed over the past 5 years?

30.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CDS has high quality earnings.

Growing Profit Margin: CDS's current net profit margins (41.7%) are higher than last year (17.9%).


Past Earnings Growth Analysis

Earnings Trend: CDS's earnings have grown significantly by 30.3% per year over the past 5 years.

Accelerating Growth: CDS's earnings growth over the past year (152.6%) exceeds its 5-year average (30.3% per year).

Earnings vs Industry: CDS earnings growth over the past year (152.6%) exceeded the Software industry 35.2%.


Return on Equity

High ROE: CDS's Return on Equity (46%) is considered outstanding.


Next Steps

Financial Health

How is Cadence Design Systems's financial position?


Financial Position Analysis

Short Term Liabilities: CDS's short term assets ($1.4B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: CDS's short term assets ($1.4B) exceed its long term liabilities ($597.6M).


Debt to Equity History and Analysis

Debt Level: CDS's debt to equity ratio (27.1%) is considered satisfactory.

Reducing Debt: CDS's debt to equity ratio has reduced from 47.4% to 27.1% over the past 5 years.

Debt Coverage: CDS's debt is well covered by operating cash flow (130%).

Interest Coverage: CDS's interest payments on its debt are well covered by EBIT (59.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Cadence Design Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate CDS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CDS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CDS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CDS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CDS's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

11.3yrs

Average management tenure


CEO

Lip-Bu Tan (59yo)

11.33yrs

Tenure

US$19,146,556

Compensation

Mr. Lip-Bu Tan is a Co-Founder, Partner, Managing Director, and Chairman of Walden Riverwood Ventures. Mr. Tan serves as Director of Green Hills Software, Inc. and Managing Partner of WRVI Capital. He serv ...


CEO Compensation Analysis

Compensation vs Market: Lip-Bu's total compensation ($USD19.15M) is above average for companies of similar size in the German market ($USD5.19M).

Compensation vs Earnings: Lip-Bu's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Lip-Bu Tan
CEO & Director11.33yrsUS$19.15m0.74% $164.2m
Anirudh Devgan
President2.5yrsUS$9.31m0.12% $26.9m
John Wall
Senior VP & CFO12.58yrsUS$4.42m0.069% $15.3m
Aneel Zaman
Senior Vice President of Worldwide Field Operations4.67yrsUS$4.65m0.064% $14.2m
Thomas Beckley
Senior VP & General Manager of the Custom IC and PCB Group7.67yrsUS$4.40m0.093% $20.6m
Ariel Sella
Co-Founderno datano datano data
James Haddad
Corporate VP of Corporate Finance & Treasurer14.08yrsno datano data
Alan Lindstrom
Senior Group Director of Investor Relationsno datano datano data
James Cowie
Senior VP12.08yrsUS$964.06k0.028% $6.3m
Nimish Modi
Senior Vice President of Marketing & Business Developmentno dataUS$1.43mno data

11.3yrs

Average Tenure

54yo

Average Age

Experienced Management: CDS's management team is seasoned and experienced (11.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Lip-Bu Tan
CEO & Director11.33yrsUS$19.15m0.74% $164.2m
Young Sohn
Director7.25yrsUS$320.02k0.018% $3.9m
Mark Adams
Independent Director5.25yrsUS$320.96k0.0089% $2.0m
James Plummer
Independent Director8.58yrsUS$321.02k0.015% $3.3m
Alberto Sangiovanni-Vincentelli
Independent Director28.33yrsUS$293.21k0.029% $6.3m
John Shoven
Independent Chairman of the Board15.33yrsUS$452.99k0.071% $15.7m
Lewis Chew
Director0.17yrno data0.0010% $224.1k
Susan Bostrom
Independent Director9.25yrsUS$336.02k0.0055% $1.2m
Ita Brennan
Independent Director0.17yrno data0.0010% $221.8k

8.6yrs

Average Tenure

59yo

Average Age

Experienced Board: CDS's board of directors are considered experienced (8.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Insufficient data to determine if shareholders have been diluted in the past year.


Top Shareholders

Company Information

Cadence Design Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cadence Design Systems, Inc.
  • Ticker: CDS
  • Exchange: DB
  • Founded: 1988
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$24.166b
  • Listing Market Cap: US$22.184b
  • Shares outstanding: 280.83m
  • Website: https://www.cadence.com

Number of Employees


Location

  • Cadence Design Systems, Inc.
  • 2655 Seely Avenue
  • Building 5
  • San Jose
  • California
  • 95134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CDNSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 1990
CDSDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1990
CDSXTRA (XETRA Trading Platform)YesCommon StockDEEURSep 1990
0HS2LSE (London Stock Exchange)YesCommon StockGBUSDSep 1990
CDNS *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1990

Biography

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design products; physical implementation tools, including place and route, optimization, and multiple patterning preparation; and signoff products to signoff the design as ready for manufacture by a silicon foundry. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system interconnect design products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products consisting of pre-verified and customizable functional blocks to integrate into customer’s ICs; and verification IP and memory models for use in system-level verification to model correct behavior of full systems interacting with their environments. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. Cadence Design Systems, Inc. was founded in 1988 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/25 21:01
End of Day Share Price2020/05/25 00:00
Earnings2020/03/28
Annual Earnings2019/12/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.