Executive Summary
Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide.
Rewards
PE ratio (23.7x) is below the Software industry average (27.7x)
Risk Analysis
Earnings are forecast to decline by an average of -3.4% per year for the next 3 years
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
| CDS | Industry | Market | |
|---|---|---|---|
| 7 Day | 4.6% | 0.06% | 2.2% |
| 30 Day | 7.5% | 1.5% | 8.0% |
| 90 Day | 23.7% | -7.2% | -9.6% |
| 1 Year | 38.1%38.1% | -2.3%-3.6% | -2.3%-3.9% |
| 3 Year | 155.8%155.8% | 21.2%16.3% | -7.6%-14.8% |
| 5 Year | 342.2%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
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Director | 11.33yrs | US$19.15m | 0.74% $164.2m | |
| President | 2.5yrs | US$9.31m | 0.12% $26.9m | |
| Senior VP & CFO | 12.58yrs | US$4.42m | 0.069% $15.3m | |
| Senior Vice President of Worldwide Field Operations | 4.67yrs | US$4.65m | 0.064% $14.2m | |
| Senior VP & General Manager of the Custom IC and PCB Group | 7.67yrs | US$4.40m | 0.093% $20.6m | |
| Co-Founder | no data | no data | no data | |
| Corporate VP of Corporate Finance & Treasurer | 14.08yrs | no data | no data | |
| Senior Group Director of Investor Relations | no data | no data | no data | |
| Senior VP | 12.08yrs | US$964.06k | 0.028% $6.3m | |
| Senior Vice President of Marketing & Business Development | no data | US$1.43m | no 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
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Director | 11.33yrs | US$19.15m | 0.74% $164.2m | |
| Director | 7.25yrs | US$320.02k | 0.018% $3.9m | |
| Independent Director | 5.25yrs | US$320.96k | 0.0089% $2.0m | |
| Independent Director | 8.58yrs | US$321.02k | 0.015% $3.3m | |
| Independent Director | 28.33yrs | US$293.21k | 0.029% $6.3m | |
| Independent Chairman of the Board | 15.33yrs | US$452.99k | 0.071% $15.7m | |
| Director | 0.17yr | no data | 0.0010% $224.1k | |
| Independent Director | 9.25yrs | US$336.02k | 0.0055% $1.2m | |
| Independent Director | 0.17yr | no data | 0.0010% $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
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| CDNS | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Sep 1990 |
| CDS | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Sep 1990 |
| CDS | XTRA (XETRA Trading Platform) | Yes | Common Stock | DE | EUR | Sep 1990 |
| 0HS2 | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Sep 1990 |
| CDNS * | BMV (Bolsa Mexicana de Valores) | Yes | Common Stock | MX | MXN | Sep 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/05/25 21:01 |
| End of Day Share Price | 2020/05/25 00:00 |
| Earnings | 2020/03/28 |
| Annual Earnings | 2019/12/28 |
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.