Cadence Design Systems Inc

Technology
Computer Software: Prepackaged Software
www.cadence.com

Earnings Score
Moat Score
Safety Score
Final Score

Market Cap $83.56B
PE 80
Debt $2.48B
Cash $2.79B
EV $83.25B
FCF $952.24M

Earnings

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Sales & Net Margins

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Earnings	$1.04B
EBIT	$1.32B
ROE	23%
ROA	14%
FCF	$952.24M
Equity	$4.56B
Growth Stability	100%
PE	80.41
PEG	19.98
PB	18.31
P/FCF	87.75
P/S	19.19
Price/Cash	0.03
Debt/Equity	0.54
Debt/FCF	2.6
Net Margins	22%
Op. Margins	30%
Earnings CAGR	23%
Sales Growth YoY	19%
Sales Growth QoQ	15%
Sales CAGR	12%
FCF CAGR	17%
Equity CAGR	16%
Earnings Stability	0.78
Earnings Growth YoY	-6%
Earnings Growth QoQ	4%

Earnings CAGR 5Y	4%
Sales CAGR 5Y	15%
FCF CAGR 5Y	11%
Equity CAGR 5Y	14%
Earnings CAGR 3Y	14%
Sales CAGR 3Y	14%
FCF CAGR 3Y	-2%
Equity CAGR 3Y	20%
Market Cap	$83.56B
Revenue	$4.35B
Assets	$9.17B
Total Debt	$2.48B
Cash	$2.79B
Shares Outstanding	270.93M
EV	83.25B
Earnings Score	93%
Moat Score	96%
Safety Score	92%
Final Score	94%
Working Capital	2.42B
Current Ratio	2.45
Shares Growth 3y	-0%
Equity Growth QoQ	7%
Equity Growth YoY	47%

Assets & ROA

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Stockholders Equity & ROE

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Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Cadence offers a portfolio of design IP, as well as system design and analysis products, which enable system-level analysis and verification solutions. Cadence's comprehensive portfolio is benefiting from a mutual convergence of semiconductor companies moving up-stack toward systems-like companies, and systems companies moving down-stack toward in-house chip design. The resulting expansion in EDA customers, alongside secular digitalization of various end markets, benefits EDA vendors like Cadence.

SEC Filings

Direct access to Cadence Design Systems Inc (CDNS) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Oct 01
- 10-Q Jul 02
- 10-Q Apr 02
- 10-K Jan 01

Sector Comparison

How does Cadence Design Systems Inc compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Cadence Design Systems Inc compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 23%

Stability 78%

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Cadence Design Systems Inc Discounted Cash Flow

Fully customizable DCF calculator online for Cadence Design Systems Inc.

Years

Calculation mode

= $32B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$952M	$1.1B	$1.3B	$1.5B	$1.8B	$2.1B	$2.5B	$2.9B	$3.4B	$4B	$4.6B	$46B
DCF		$1B	$1.1B	$1.1B	$1.2B	$1.3B	$1.4B	$1.5B	$1.6B	$1.7B	$1.8B	$18B
Value	$32B

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.

Years	01/2015	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	12/2021	12/2022	12/2023	TTM
Net Margins	10%	15%	11%	11%	16%	42%	22%	23%	24%	25%	22%
ROA	-	12%	12%	13%	16%	15%	16%	18%	21%	23%	14%
ROE	-	18%	27%	21%	27%	47%	24%	25%	31%	31%	23%

Good Net Margins (21.77%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

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.

Years	01/2015	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	1.05	1.65	1.56	0.64	0.53	0.43	0.34	0.58	0.24	2.6
Debt over Equity	0.52	0.25	0.87	0.65	0.27	0.16	0.14	0.13	0.24	0.09	0.54
Growth Stability	-	-	-	100%	100%	100%	100%	100%	100%	100%	100%

Neutral Debt/FCF ratio (2.6)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Good Debt/Equity ratio (0.54)

The company is not overleveraged and has a good balance between equity and debt.

Good Graham’s Stability (100%)

The company has a good stability in its earnings, which is a sign of a good competitive advantage.

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.

Years	01/2015	01/2016	12/2016	12/2017	12/2018	12/2019	01/2021	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	8%	7%	7%	10%	9%	15%	11%	19%	15%	15%
Earnings YoY growth	-	59%	-20%	0%	69%	186%	-40%	18%	22%	23%	4%
Equity YoY growth	-	3%	-46%	33%	30%	63%	19%	10%	0%	24%	14%
FCF YoY growth	-	20%	17%	6%	32%	21%	24%	28%	8%	11%	11%