NasdaqGS:CDNS

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

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


Market Performance


7 Day Return

0.7%

CDNS

-0.7%

US Software

-0.6%

US Market


1 Year Return

45.0%

CDNS

14.0%

US Software

0.7%

US Market

CDNS outperformed the Software industry which returned 14% over the past year.

CDNS outperformed the Market in United States of America which returned 0.6% over the past year.


Share holder returns

CDNSIndustryMarket
7 Day0.7%-0.7%-0.6%
30 Day-5.4%-1.2%2.9%
90 Day-7.5%-1.1%1.3%
1 Year45.0%45.0%15.6%14.0%2.9%0.7%
3 Year166.1%166.1%119.9%111.2%44.6%35.2%
5 Year281.8%281.8%168.7%149.0%61.9%44.2%

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 based on future cash flows and its price relative to the stock market?

42.42x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Cadence Design Systems's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Cadence Design Systems's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Cadence Design Systems is good value based on earnings compared to the US Software industry average.

Cadence Design Systems is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

Cadence Design Systems is poor value based on expected growth next year.


Price Based on Value of Assets

Cadence Design Systems is overvalued based on assets compared to the US Software industry average.


Next Steps

Future Growth

How is Cadence Design Systems expected to perform in the next 1 to 3 years based on estimates from 10 analysts?

7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Cadence Design Systems's revenue is expected to grow by 6.2% yearly, however this is not considered high growth (20% yearly).

Cadence Design Systems's earnings are expected to grow by 7.6% yearly, however this is not considered high growth (20% yearly).

Cadence Design Systems's revenue growth is positive but not above the United States of America market average.

Cadence Design Systems's earnings growth is positive but not above the United States of America market average.

Cadence Design Systems's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Cadence Design Systems is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).


Next Steps

Past Performance

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

15.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Cadence Design Systems's year on year earnings growth rate has been positive over the past 5 years.

Cadence Design Systems's 1-year earnings growth exceeds its 5-year average (98.2% vs 15.3%)

Cadence Design Systems's earnings growth has exceeded the US Software industry average in the past year (98.2% vs 23%).


Return on Equity

Cadence Design Systems has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

Cadence Design Systems used its assets more efficiently than the US Software industry average last year based on Return on Assets.


Return on Capital Employed

Cadence Design Systems has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Cadence Design Systems's financial position?


Financial Position Analysis

Cadence Design Systems is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Cadence Design Systems's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Cadence Design Systems's level of debt (24.2%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (34.2% vs 24.2% today).

Debt is well covered by operating cash flow (194.9%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 41.7x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 2.8x debt.


Next Steps

Dividend

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


Dividend Yield and Payments Analysis

Unable to evaluate Cadence Design Systems's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Cadence Design Systems's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Cadence Design Systems has not reported any payouts.

Unable to verify if Cadence Design Systems's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Cadence Design Systems has not reported any payouts.


Future Payout to Shareholders

No need to calculate the sustainability of Cadence Design Systems's dividends in 3 years as they are not expected to pay a notable one for United States of America.


Next Steps

Management

What is the CEO of Cadence Design Systems's salary, the management and board of directors tenure and is there insider trading?

7.3yrs

Average management tenure


CEO

Lip-Bu Tan (59yo)

10.7yrs

Tenure

US$7,556,368

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

Lip-Bu's remuneration is lower than average for companies of similar size in United States of America.

Lip-Bu's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

7.3yrs

Average Tenure

52yo

Average Age

The average tenure for the Cadence Design Systems management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

8.6yrs

Average Tenure

64yo

Average Age

The tenure for the Cadence Design Systems board of directors is about average.


Insider Trading

Cadence Design Systems individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$88,60813 Aug 19
James Cowie
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares1,251
Max PriceUS$70.83
SellUS$2,274,61828 Mar 19
Aneel Zaman
EntityIndividual
Role
Chief Operating Officer
Senior Vice President of Worldwide Field Operations
Shares36,824
Max PriceUS$61.77
SellUS$294,46506 Mar 19
Chin-Chi Teng
EntityIndividual
Shares5,084
Max PriceUS$57.92
SellUS$2,018,10005 Mar 19
Susan Bostrom
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares35,000
Max PriceUS$57.66

Ownership Breakdown


Management Team

  • Lip-Bu Tan (59yo)

    CEO & Director

    • Tenure: 10.7yrs
    • Compensation: US$7.56m
  • Surendra Mandava (60yo)

    Senior VP of Research & Development and GM of IP Group

    • Tenure: 2.7yrs
    • Compensation: US$2.46m
  • Ariel Sella

    Co-Founder

    • Tenure: 0yrs
  • Jim Cowie (54yo)

    Senior VP

    • Tenure: 11.4yrs
    • Compensation: US$964.06k
  • James Haddad

    Corporate VP of Corporate Finance & Treasurer

    • Tenure: 13.4yrs
  • Alan Lindstrom

    Senior Group Director of Investor Relations

    • Tenure: 0yrs
  • Anirudh Devgan (49yo)

    President

    • Tenure: 1.8yrs
    • Compensation: US$4.36m
  • Neil Zaman (50yo)

    Senior Vice President of Worldwide Field Operations

    • Tenure: 4yrs
    • Compensation: US$2.69m
  • Neil Kole

    Senior VP & Chief Information Officer

    • Tenure: 3.3yrs
  • John Wall (48yo)

    Senior VP & CFO

    • Tenure: 11.9yrs
    • Compensation: US$2.05m

Board Members

  • Lip-Bu Tan (59yo)

    CEO & Director

    • Tenure: 10.7yrs
    • Compensation: US$7.56m
  • Young Sohn (63yo)

    Director

    • Tenure: 6.6yrs
    • Compensation: US$319.00k
  • Maggie Wilderotter (64yo)

    Director

    • Tenure: 2.3yrs
    • Compensation: US$292.00k
  • Roger Siboni (65yo)

    Independent Director

    • Tenure: 20.7yrs
    • Compensation: US$355.90k
  • Mark Adams (55yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$299.00k
  • James Plummer (74yo)

    Independent Director

    • Tenure: 7.9yrs
    • Compensation: US$320.00k
  • Alberto Sangiovanni-Vincentelli (71yo)

    Independent Director

    • Tenure: 27.7yrs
    • Compensation: US$303.18k
  • John Shoven (72yo)

    Chairman of the Board

    • Tenure: 14.7yrs
    • Compensation: US$463.43k
  • Sue Bostrom (59yo)

    Independent Director

    • Tenure: 8.6yrs
    • Compensation: US$338.00k

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$18.493b
  • Shares outstanding: 280.15m
  • 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
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 an ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/21 23:33
End of Day Share Price2019/09/20 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


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.