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Market Cap

US$40.6b

Last Updated

2021/04/10 22:27 UTC

Data Sources

Company Financials +

Executive Summary

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


Snowflake Analysis

Flawless balance sheet with acceptable track record.


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: CDNS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CDNS's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

2.7%

CDNS

3.4%

US Software

1.6%

US Market


1 Year Return

102.9%

CDNS

62.8%

US Software

55.3%

US Market

Return vs Industry: CDNS exceeded the US Software industry which returned 62.8% over the past year.

Return vs Market: CDNS exceeded the US Market which returned 55.3% over the past year.


Shareholder returns

CDNSIndustryMarket
7 Day2.7%3.4%1.6%
30 Day11.7%6.0%4.1%
90 Day6.7%5.8%5.5%
1 Year102.9%102.9%63.9%62.8%58.1%55.3%
3 Year289.7%289.7%140.9%133.7%63.8%53.3%
5 Year519.6%519.6%300.6%278.3%120.2%95.7%

Long-Term 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

Valuation

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

67.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CDNS ($145.35) is trading above our estimate of fair value ($90.15)

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


Price To Earnings Ratio

PE vs Industry: CDNS is poor value based on its PE Ratio (67.4x) compared to the US Software industry average (54x).

PE vs Market: CDNS is poor value based on its PE Ratio (67.4x) compared to the US market (22.3x).


Price to Earnings Growth Ratio

PEG Ratio: CDNS is poor value based on its PEG Ratio (7.2x)


Price to Book Ratio

PB vs Industry: CDNS is overvalued based on its PB Ratio (16.3x) compared to the US Software industry average (8.7x).


Future Growth

How is Cadence Design Systems forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CDNS's forecast earnings growth (9.3% per year) is above the savings rate (2%).

Earnings vs Market: CDNS's earnings (9.3% per year) are forecast to grow slower than the US market (18.7% per year).

High Growth Earnings: CDNS's earnings are forecast to grow, but not significantly.

Revenue vs Market: CDNS's revenue (7.2% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: CDNS's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CDNS's Return on Equity is forecast to be high in 3 years time (26.3%)


Past Performance

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

35.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CDNS has high quality earnings.

Growing Profit Margin: CDNS's current net profit margins (22%) are lower than last year (42.3%).


Past Earnings Growth Analysis

Earnings Trend: CDNS's earnings have grown significantly by 35.2% per year over the past 5 years.

Accelerating Growth: CDNS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CDNS had negative earnings growth (-40.3%) over the past year, making it difficult to compare to the Software industry average (16.3%).


Return on Equity

High ROE: CDNS's Return on Equity (23.7%) is considered high.


Financial Health

How is Cadence Design Systems's financial position?


Financial Position Analysis

Short Term Liabilities: CDNS's short term assets ($1.5B) exceed its short term liabilities ($796.8M).

Long Term Liabilities: CDNS's short term assets ($1.5B) exceed its long term liabilities ($661.0M).


Debt to Equity History and Analysis

Debt Level: CDNS's debt to equity ratio (13.9%) is considered satisfactory.

Reducing Debt: CDNS's debt to equity ratio has reduced from 25.6% to 13.9% over the past 5 years.

Debt Coverage: CDNS's debt is well covered by operating cash flow (260.9%).

Interest Coverage: CDNS's interest payments on its debt are well covered by EBIT (38.7x coverage).


Balance Sheet


Dividend

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


Dividend Yield vs Market

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

High Dividend: Unable to evaluate CDNS'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 CDNS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CDNS'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 CDNS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

10.4yrs

Average management tenure


CEO

Lip-Bu Tan (61 yo)

12.25yrs

Tenure

US$9,604,640

Compensation

Mr. Lip-Bu Tan serves as Board Member at VDOO Connected Trust Ltd. He has served as Chief Executive Officer of Cadence Design Systems, Inc. since January 2009. From January 2009 to November 2017, Mr. Tan a...


CEO Compensation Analysis

Compensation vs Market: Lip-Bu's total compensation ($USD9.60M) is about average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Lip-Bu's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: CDNS's management team is seasoned and experienced (10.4 years average tenure).


Board Members

Experienced Board: CDNS's board of directors are considered experienced (8.8 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: Shareholders have not been meaningfully 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: CDNS
  • Exchange: NasdaqGS
  • Founded: 1988
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$40.563b
  • Shares outstanding: 279.07m
  • Website: https://www.cadence.com

Number of Employees


Location

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

Listings


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 an...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/10 22:27
End of Day Share Price2021/04/09 00:00
Earnings2021/01/02
Annual Earnings2021/01/02


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.