CADENCE DESIGN SYS INC (CDS.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:CDS - US1273871087 - Common Stock
268.2 EUR
-2.15 (-0.8%)
CDS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 115 industry peers in the Software industry. CDS gets an excellent profitability rating and is at the same time showing great financial health properties. CDS is valued quite expensively, but it does show have an excellent growth rating. These ratings could make CDS a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
CDS had positive earnings in the past year.
In the past year CDS had a positive cash flow from operations.
In the past 5 years CDS has always been profitable.
Each year in the past 5 years CDS had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 11.05%, CDS is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
CDS has a Return On Equity of 20.41%. This is in the better half of the industry: CDS outperforms 80.00% of its industry peers.
The Return On Invested Capital of CDS (15.75%) is better than 86.09% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CDS is significantly above the industry average of 12.89%.
The last Return On Invested Capital (15.75%) for CDS is well below the 3 year average (20.16%), which needs to be investigated, but indicates that CDS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROIC | 15.75% |
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
With a decent Profit Margin value of 20.35%, CDS is doing good in the industry, outperforming 75.65% of the companies in the same industry.
In the last couple of years the Profit Margin of CDS has declined.
CDS has a Operating Margin of 31.57%. This is amongst the best in the industry. CDS outperforms 88.70% of its industry peers.
CDS's Operating Margin has improved in the last couple of years.
CDS's Gross Margin of 85.55% is amongst the best of the industry. CDS outperforms 80.87% of its industry peers.
In the last couple of years the Gross Margin of CDS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CDS is creating value.
The number of shares outstanding for CDS has been increased compared to 1 year ago.
Compared to 5 years ago, CDS has less shares outstanding
The debt/assets ratio for CDS is higher compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of CDS is 1.68, which is an excellent value as it means it would take CDS, only 1.68 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.68, CDS is in the better half of the industry, outperforming 68.70% of the companies in the same industry.
CDS has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.48, CDS is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for CDS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | N/A |
ROIC/WACC1.43
WACC10.98%
2.3 Liquidity
A Current Ratio of 3.05 indicates that CDS has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.05, CDS belongs to the top of the industry, outperforming 85.22% of the companies in the same industry.
A Quick Ratio of 2.84 indicates that CDS has no problem at all paying its short term obligations.
CDS has a better Quick ratio (2.84) than 84.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 28.52% over the past year.
CDS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.21% yearly.
Looking at the last year, CDS shows a quite strong growth in Revenue. The Revenue has grown by 19.72% in the last year.
CDS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.72% yearly.
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
3.2 Future
Based on estimates for the next years, CDS will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.14% on average per year.
CDS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.93% yearly.
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 45.00, which means the current valuation is very expensive for CDS.
Compared to the rest of the industry, the Price/Earnings ratio of CDS is on the same level as its industry peers.
When comparing the Price/Earnings ratio of CDS to the average of the S&P500 Index (26.50), we can say CDS is valued expensively.
Based on the Price/Forward Earnings ratio of 38.52, the valuation of CDS can be described as expensive.
CDS's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.93. CDS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45 | ||
| Fwd PE | 38.52 |
4.2 Price Multiples
CDS's Enterprise Value to EBITDA ratio is in line with the industry average.
CDS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.19 | ||
| EV/EBITDA | 46.02 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CDS does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of CDS may justify a higher PE ratio.
A more expensive valuation may be justified as CDS's earnings are expected to grow with 16.29% in the coming years.
PEG (NY)2.2
PEG (5Y)2.03
EPS Next 2Y17.24%
EPS Next 3Y16.29%
5. Dividend
5.1 Amount
No dividends for CDS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
FRA:CDS (12/23/2025, 7:00:00 PM)
268.2
-2.15 (-0.8%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.78%
Inst Owner ChangeN/A
Ins Owners0.25%
Ins Owner ChangeN/A
Market Cap73.00B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts80.63
Price Target334.7 (24.79%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)4.96%
Min EPS beat(2)4.06%
Max EPS beat(2)5.86%
EPS beat(4)4
Avg EPS beat(4)3.6%
Min EPS beat(4)1.28%
Max EPS beat(4)5.86%
EPS beat(8)8
Avg EPS beat(8)3.98%
EPS beat(12)12
Avg EPS beat(12)3.22%
EPS beat(16)16
Avg EPS beat(16)4.67%
Revenue beat(2)1
Avg Revenue beat(2)-0.36%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)0.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.92%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.03%
Revenue beat(8)2
Avg Revenue beat(8)-0.69%
Revenue beat(12)3
Avg Revenue beat(12)-0.68%
Revenue beat(16)7
Avg Revenue beat(16)-0.18%
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 | 45 | ||
| Fwd PE | 38.52 | ||
| P/S | 16.51 | ||
| P/FCF | 58.19 | ||
| P/OCF | 53.22 | ||
| P/B | 16.55 | ||
| P/tB | 45.73 | ||
| EV/EBITDA | 46.02 |
EPS(TTM)5.96
EY2.22%
EPS(NY)6.96
Fwd EY2.6%
FCF(TTM)4.61
FCFY1.72%
OCF(TTM)5.04
OCFY1.88%
SpS16.25
BVpS16.21
TBVpS5.87
PEG (NY)2.2
PEG (5Y)2.03
Graham Number46.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROCE | 20.09% | ||
| ROIC | 15.75% | ||
| ROICexc | 23.73% | ||
| ROICexgc | 60.82% | ||
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% | ||
| FCFM | 28.37% |
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%
ROICexgc growth 3Y4.04%
ROICexgc 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-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 63.33% | ||
| Cap/Sales | 2.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | 139.37% | ||
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 | ||
| Altman-Z | N/A |
F-Score7
WACC10.98%
ROIC/WACC1.43
Cap/Depr(3y)78.99%
Cap/Depr(5y)69.81%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.97%
Profit Quality(3y)119.11%
Profit Quality(5y)128.61%
High Growth Momentum
Growth
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year25.41%
EBIT Next 3Y17.85%
EBIT Next 5Y16.55%
FCF growth 1Y19.71%
FCF growth 3Y2.64%
FCF growth 5Y11.29%
OCF growth 1Y20.58%
OCF growth 3Y4.62%
OCF growth 5Y11.56%
CADENCE DESIGN SYS INC / CDS.DE FAQ
Can you provide the ChartMill fundamental rating for CADENCE DESIGN SYS INC?
ChartMill assigns a fundamental rating of 6 / 10 to CDS.DE.
Can you provide the valuation status for CADENCE DESIGN SYS INC?
ChartMill assigns a valuation rating of 2 / 10 to CADENCE DESIGN SYS INC (CDS.DE). This can be considered as Overvalued.
What is the profitability of CDS stock?
CADENCE DESIGN SYS INC (CDS.DE) has a profitability rating of 8 / 10.
Can you provide the financial health for CDS stock?
The financial health rating of CADENCE DESIGN SYS INC (CDS.DE) is 7 / 10.
Can you provide the expected EPS growth for CDS stock?
The Earnings per Share (EPS) of CADENCE DESIGN SYS INC (CDS.DE) is expected to grow by 20.43% in the next year.