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Is CADENCE DESIGN SYS INC (NASDAQ:CDNS) suited for quality investing?

By Mill Chart

Last update: Sep 15, 2023

In this article we will dive into CADENCE DESIGN SYS INC (NASDAQ:CDNS) as a possible candidate for quality investing. Investors should always do their own research, but we noticed CADENCE DESIGN SYS INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Looking into the quality metrics of CADENCE DESIGN SYS INC

  • CADENCE DESIGN SYS INC has shown strong performance in revenue growth over the past 5 years, with a 12.89% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
  • The ROIC excluding cash and goodwill of CADENCE DESIGN SYS INC stands at 71.41%, reflecting the company's strong financial management and profitability. This metric underscores its ability to generate favorable returns on the capital invested in its core operations.
  • With a favorable Debt/Free Cash Flow Ratio of 0.57, CADENCE DESIGN SYS INC showcases its sound financial discipline and cash flow management. This ratio indicates the company's ability to service its debt obligations while maintaining sufficient free cash flow for future investments or operational needs.
  • CADENCE DESIGN SYS INC exhibits impressive Profit Quality (5-year) with a 128.0% ratio, reflecting its consistent ability to generate high-quality profits. This metric underscores the company's strong financial performance and commitment to delivering sustainable earnings.
  • The 5-year EBIT growth of CADENCE DESIGN SYS INC has been remarkable, with 26.35% increase. This demonstrates the company's ability to improve its operational efficiency and indicates its competitiveness within the market.
  • CADENCE DESIGN SYS INC has achieved impressive EBIT 5-year growth, surpassing its Revenue 5-year growth. This indicates the company's ability to improve its profitability and operational efficiency, highlighting its strong financial performance.

What is the full fundamental picture of NASDAQ:CDNS telling us.

ChartMill assigns a Fundamental Rating to every stock. This score, ranging from 0 to 10, is updated daily and is determined by evaluating multiple fundamental indicators and properties.

CDNS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. CDNS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CDNS is not overvalued while it is showing excellent growth. This is an interesting combination. This makes CDNS very considerable for growth and quality investing!

Our latest full fundamental report of CDNS contains the most current fundamental analsysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.



NASDAQ:CDNS (11/29/2023, 7:00:01 PM)

After market: 278.99 +3.78 (+1.37%)


+4.49 (+1.66%)


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