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Why Quality Investors May Find CADENCE DESIGN SYS INC (NASDAQ:CDNS) Attractive.

By Mill Chart

Last update: Nov 1, 2023

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if CADENCE DESIGN SYS INC (NASDAQ:CDNS) is suited for quality investing. Investors should of course do their own research, but we spotted CADENCE DESIGN SYS INC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Key Considerations for Quality Investors.

  • Over the past 5 years, CADENCE DESIGN SYS INC has experienced impressive revenue growth, with 12.89% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
  • With a robust ROIC excluding cash and goodwill at 71.98%, CADENCE DESIGN SYS INC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
  • CADENCE DESIGN SYS INC demonstrates a well-balanced Debt/Free Cash Flow Ratio of 0.53, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
  • CADENCE DESIGN SYS INC demonstrates consistent Profit Quality over the past 5 years, with a strong 128.0%. This indicates the company's ability to generate sustainable and reliable profits, showcasing its long-term profitability and financial stability.
  • With a robust 5-year EBIT growth of 26.35%, CADENCE DESIGN SYS INC showcases its ability to consistently expand its operating profitability. This trend indicates the company's effective cost management and revenue generation strategies.
  • With EBIT 5-year growth outpacing its Revenue 5-year growth, CADENCE DESIGN SYS INC showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

A complete fundamental analysis of NASDAQ:CDNS

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

Taking everything into account, CDNS scores 7 out of 10 in our fundamental rating. CDNS was compared to 278 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make CDNS suitable for growth and quality investing!

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

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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CADENCE DESIGN SYS INC

NASDAQ:CDNS (2/22/2024, 11:23:06 AM)

306.3

+15.54 (+5.34%)

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