CADENCE DESIGN SYS INC (1CDNS.MI) Stock Fundamental Analysis
BIT:1CDNS - Euronext Milan - US1273871087 - Common Stock - Currency: EUR
We assign a fundamental rating of 7 out of 10 to 1CDNS. 1CDNS was compared to 102 industry peers in the Software industry. 1CDNS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 1CDNS is valued quite expensive, but it does show an excellent growth. These ratings would make 1CDNS suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year 1CDNS was profitable.
1CDNS had a positive operating cash flow in the past year.
In the past 5 years 1CDNS has always been profitable.
In the past 5 years 1CDNS always reported a positive cash flow from operatings.
1.2 Ratios
1CDNS's Return On Assets of 12.00% is amongst the best of the industry. 1CDNS outperforms 91.74% of its industry peers.
The Return On Equity of 1CDNS (22.64%) is better than 88.07% of its industry peers.
The Return On Invested Capital of 1CDNS (15.16%) is better than 89.91% of its industry peers.
1CDNS had an Average Return On Invested Capital over the past 3 years of 20.16%. This is significantly above the industry average of 10.32%.
The last Return On Invested Capital (15.16%) for 1CDNS is well below the 3 year average (20.16%), which needs to be investigated, but indicates that 1CDNS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12% | ||
| ROE | 22.64% | ||
| ROIC | 15.16% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
1.3 Margins
Looking at the Profit Margin, with a value of 22.19%, 1CDNS belongs to the top of the industry, outperforming 87.16% of the companies in the same industry.
In the last couple of years the Profit Margin of 1CDNS has declined.
1CDNS's Operating Margin of 30.60% is amongst the best of the industry. 1CDNS outperforms 91.74% of its industry peers.
1CDNS's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 85.86%, 1CDNS belongs to the top of the industry, outperforming 82.57% of the companies in the same industry.
1CDNS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.6% | ||
| PM (TTM) | 22.19% | ||
| GM | 85.86% |
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
2. Health
2.1 Basic Checks
1CDNS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, 1CDNS has more shares outstanding
The number of shares outstanding for 1CDNS has been reduced compared to 5 years ago.
1CDNS has a worse debt/assets ratio than last year.
2.2 Solvency
1CDNS has an Altman-Z score of 13.91. This indicates that 1CDNS is financially healthy and has little risk of bankruptcy at the moment.
1CDNS's Altman-Z score of 13.91 is amongst the best of the industry. 1CDNS outperforms 95.41% of its industry peers.
The Debt to FCF ratio of 1CDNS is 1.80, which is an excellent value as it means it would take 1CDNS, only 1.80 years of fcf income to pay off all of its debts.
1CDNS has a Debt to FCF ratio of 1.80. This is in the better half of the industry: 1CDNS outperforms 69.72% of its industry peers.
1CDNS has a Debt/Equity ratio of 0.52. This is a neutral value indicating 1CDNS is somewhat dependend on debt financing.
1CDNS's Debt to Equity ratio of 0.52 is on the low side compared to the rest of the industry. 1CDNS is outperformed by 64.22% of its industry peers.
Even though the debt/equity ratio score it not favorable for 1CDNS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.8 | ||
| Altman-Z | 13.91 |
ROIC/WACC1.7
WACC8.9%
2.3 Liquidity
A Current Ratio of 3.07 indicates that 1CDNS has no problem at all paying its short term obligations.
1CDNS has a better Current ratio (3.07) than 85.32% of its industry peers.
A Quick Ratio of 2.90 indicates that 1CDNS has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 2.90, 1CDNS belongs to the best of the industry, outperforming 85.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.07 | ||
| Quick Ratio | 2.9 |
3. Growth
3.1 Past
1CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.64%, which is quite impressive.
1CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.21% yearly.
The Revenue has grown by 19.55% in the past year. This is quite good.
1CDNS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.72% yearly.
EPS 1Y (TTM)26.64%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%34.19%
Revenue 1Y (TTM)19.55%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%23.12%
3.2 Future
Based on estimates for the next years, 1CDNS will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.75% on average per year.
The Revenue is expected to grow by 9.79% on average over the next years. This is quite good.
EPS Next Y16.11%
EPS Next 2Y15.21%
EPS Next 3Y14.83%
EPS Next 5Y10.75%
Revenue Next Year11.89%
Revenue Next 2Y11.82%
Revenue Next 3Y11.64%
Revenue Next 5Y9.79%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 46.68, 1CDNS can be considered very expensive at the moment.
Based on the Price/Earnings ratio, 1CDNS is valued a bit cheaper than 64.22% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.57. 1CDNS is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 37.51, the valuation of 1CDNS can be described as expensive.
1CDNS's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of 1CDNS to the average of the S&P500 Index (22.41), we can say 1CDNS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.68 | ||
| Fwd PE | 37.51 |
4.2 Price Multiples
1CDNS's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1CDNS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.87 | ||
| EV/EBITDA | 47.51 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1CDNS does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of 1CDNS may justify a higher PE ratio.
A more expensive valuation may be justified as 1CDNS's earnings are expected to grow with 14.83% in the coming years.
PEG (NY)2.9
PEG (5Y)2.1
EPS Next 2Y15.21%
EPS Next 3Y14.83%
5. Dividend
5.1 Amount
No dividends for 1CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
BIT:1CDNS (6/3/2025, 7:00:00 PM)
258.15
+5.9 (+2.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.67%
Inst Owner ChangeN/A
Ins Owners0.27%
Ins Owner ChangeN/A
Market Cap70.49B
Analysts80
Price TargetN/A
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.25%
Min EPS beat(2)1.28%
Max EPS beat(2)3.21%
EPS beat(4)4
Avg EPS beat(4)4.65%
Min EPS beat(4)1.28%
Max EPS beat(4)11.57%
EPS beat(8)8
Avg EPS beat(8)3.2%
EPS beat(12)12
Avg EPS beat(12)3.86%
EPS beat(16)16
Avg EPS beat(16)5%
Revenue beat(2)0
Avg Revenue beat(2)-1.48%
Min Revenue beat(2)-1.71%
Max Revenue beat(2)-1.24%
Revenue beat(4)1
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.87%
Revenue beat(8)2
Avg Revenue beat(8)-0.81%
Revenue beat(12)4
Avg Revenue beat(12)-0.45%
Revenue beat(16)6
Avg Revenue beat(16)-0.24%
PT rev (1m)N/A
PT rev (3m)N/A
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)N/A
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.68 | ||
| Fwd PE | 37.51 | ||
| P/S | 16.65 | ||
| P/FCF | 58.87 | ||
| P/OCF | 54.3 | ||
| P/B | 16.99 | ||
| P/tB | 45.78 | ||
| EV/EBITDA | 47.51 |
EPS(TTM)5.53
EY2.14%
EPS(NY)6.88
Fwd EY2.67%
FCF(TTM)4.39
FCFY1.7%
OCF(TTM)4.75
OCFY1.84%
SpS15.51
BVpS15.2
TBVpS5.64
PEG (NY)2.9
PEG (5Y)2.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12% | ||
| ROE | 22.64% | ||
| ROCE | 19.34% | ||
| ROIC | 15.16% | ||
| ROICexc | 23.7% | ||
| ROICexgc | 60.56% | ||
| OM | 30.6% | ||
| PM (TTM) | 22.19% | ||
| GM | 85.86% | ||
| FCFM | 28.28% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
ROICexc(3y)28.2%
ROICexc(5y)26.78%
ROICexgc(3y)72.83%
ROICexgc(5y)62.51%
ROCE(3y)25.95%
ROCE(5y)24.28%
ROICexcg growth 3Y4.04%
ROICexcg growth 5Y11.48%
ROICexc growth 3Y-4.84%
ROICexc growth 5Y2.66%
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
F-Score5
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 1.8 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 55.16% | ||
| Cap/Sales | 2.38% | ||
| Interest Coverage | 15.86 | ||
| Cash Conversion | 87.81% | ||
| Profit Quality | 127.46% | ||
| Current Ratio | 3.07 | ||
| Quick Ratio | 2.9 | ||
| Altman-Z | 13.91 |
F-Score5
WACC8.9%
ROIC/WACC1.7
Cap/Depr(3y)78.98%
Cap/Depr(5y)69.81%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.97%
Profit Quality(3y)119.1%
Profit Quality(5y)128.61%
High Growth Momentum
Growth
EPS 1Y (TTM)26.64%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%34.19%
EPS Next Y16.11%
EPS Next 2Y15.21%
EPS Next 3Y14.83%
EPS Next 5Y10.75%
Revenue 1Y (TTM)19.55%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%23.12%
Revenue Next Year11.89%
Revenue Next 2Y11.82%
Revenue Next 3Y11.64%
Revenue Next 5Y9.79%
EBIT growth 1Y24.2%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year24.07%
EBIT Next 3Y16.97%
EBIT Next 5Y9.92%
FCF growth 1Y32.44%
FCF growth 3Y2.63%
FCF growth 5Y11.29%
OCF growth 1Y27.43%
OCF growth 3Y4.61%
OCF growth 5Y11.56%