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Cadence Design Systems Inc

CDNS

Services-Prepackaged Software

Mkt Cap

$82.5B

PE

79.24

Debt

$299.8M

Cash

$1.008B

EV

$81.79B

FCF

$1.247B

Market Cap

$82.5B

P/E Ratio

79.24

Debt

$299.8M

Cash

$1.008B

EV

$81.79B

FCF

$1.247B
Charts data: {"Earnings":[{"time":"2015-01-02","value":158898000},{"time":"2016-01-01","value":252417000},{"time":"2016-12-30","value":203086000},{"time":"2017-12-29","value":204101000},{"time":"2018-12-28","value":345777000},{"time":"2019-12-27","value":988979000},{"time":"2021-01-01","value":590644000},{"time":"2021-12-31","value":695955000},{"time":"2022-12-30","value":848952000},{"time":"2023-12-30","value":1041144000}],"Sales":[{"time":"2015-01-02","value":1580932000},{"time":"2016-01-01","value":1702091000},{"time":"2016-12-30","value":1816083000},{"time":"2017-12-29","value":1943032000},{"time":"2018-12-28","value":2138022000},{"time":"2019-12-27","value":2336319000},{"time":"2021-01-01","value":2682891000},{"time":"2021-12-31","value":2988244000},{"time":"2022-12-30","value":3561718000},{"time":"2023-12-30","value":4089986000}],"Net Margins":[{"time":"2015-01-02","value":0.1005090668036323},{"time":"2016-01-01","value":0.14829818147208346},{"time":"2016-12-30","value":0.11182638678959056},{"time":"2017-12-29","value":0.10504253146628569},{"time":"2018-12-28","value":0.161727521980597},{"time":"2019-12-27","value":0.42330649196449627},{"time":"2021-01-01","value":0.220152067303517},{"time":"2021-12-31","value":0.23289764825094605},{"time":"2022-12-30","value":0.23835463672306453},{"time":"2023-12-30","value":0.25455930655997355}],"Assets":[{"time":"2015-01-02","value":3209556000},{"time":"2016-01-01","value":2351015000},{"time":"2016-12-30","value":2096908000},{"time":"2017-12-29","value":2418714000},{"time":"2018-12-28","value":2468654000},{"time":"2019-12-27","value":3357225000},{"time":"2021-01-01","value":3950785000},{"time":"2021-12-31","value":4386299000},{"time":"2022-12-30","value":5137071000},{"time":"2023-12-30","value":5669491000}],"Stockholders Equity":[{"time":"2015-01-02","value":1333574000},{"time":"2016-01-01","value":1376115000},{"time":"2016-12-30","value":741770000},{"time":"2017-12-29","value":989202000},{"time":"2018-12-28","value":1288401000},{"time":"2019-12-27","value":2102894000},{"time":"2021-01-01","value":2493018000},{"time":"2021-12-31","value":2740675000},{"time":"2022-12-30","value":2745113000},{"time":"2023-12-30","value":3404271000}],"ROE":[{"time":"2015-01-02","value":0.11915199306525172},{"time":"2016-01-01","value":0.18342725716964062},{"time":"2016-12-30","value":0.27378567480485866},{"time":"2017-12-29","value":0.20632893989296422},{"time":"2018-12-28","value":0.2683768485122256},{"time":"2019-12-27","value":0.4702942706574844},{"time":"2021-01-01","value":0.23691926813203915},{"time":"2021-12-31","value":0.25393561805029785},{"time":"2022-12-30","value":0.3092594002505544},{"time":"2023-12-30","value":0.30583464124918375}],"ROA":[{"time":"2015-01-02","value":0.06438398332978144},{"time":"2016-01-01","value":0.12140713691745905},{"time":"2016-12-30","value":0.1167914853679799},{"time":"2017-12-29","value":0.13393687720003275},{"time":"2018-12-28","value":0.1604959625771777},{"time":"2019-12-27","value":0.14648884123048053},{"time":"2021-01-01","value":0.16339841322673848},{"time":"2021-12-31","value":0.17761876242362867},{"time":"2022-12-30","value":0.2090074285521847},{"time":"2023-12-30","value":0.2261095396394491}]}

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 enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus logic synthesis and Joules RTL power solutions, as well as Modus software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. 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 design and analysis 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 comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves 5G communications, aerospace and defense, automotive, industrial and healthcare, mobile, consumer, and hyperscale computing markets. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

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Growth

%

%

Discount

%

%

Multiple

g\r+10%+11%+12%+13%+14%
0%109887
+1%1110988
+2%13111098
+3%141311109
+4%1714121110
Years012345678910TV
FCF$1.247B$1.482B$1.739B$2.014B$2.3B$2.593B$2.882B$3.16B$3.415B$3.638B$3.82B$38.2B
DCF$1.289B$1.315B$1.324B$1.315B$1.289B$1.246B$1.188B$1.116B$1.034B$944.3M$9.443B
Value$21.5B

In the chart Earnings are multiplied by this value.

Earnings Growth 24%
Earnings Stability 77%


Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years01-201612-201612-201712-201812-201901-202112-202112-202212-2023TTM
Net Margin15%11%11%16%42%22%23%24%25%25%
ROA12%12%13%16%15%16%18%21%23%23%
ROE18%27%21%27%47%24%25%31%31%31%

What is the average Net Margin?

The average Net Margin over the past 5 years is +25.52%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.22%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +18.05%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.51%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +30.74%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.8%.


Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years01-201612-201612-201712-201812-201901-202112-202112-202212-2023TTM
Debt FCF1.051.651.560.640.530.430.340.580.240.24
Debt Equity0.250.870.650.270.160.140.130.240.090.09
MIN
Graham Stability--100%100%100%100%100%100%100%100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.24.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.05.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.


Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years12-201612-201801-202112-2022Trend
Revenue12%14%15%15%1.3%
Net Income26%25%21%23%-1.6%
Stockholders Equity24%21%11%24%2.7%
FCF18%18%15%11%-0.45%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +13.85%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.33%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +24.66%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -1.59%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +21.45%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +2.73%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +18.08%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -0.45%.