Cadence Design Systems (NYSE: CDNS) is rated at BUY with a grade of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 75.34% to $91.93 million when compared to the same quarter last year. In addition, CADENCE DESIGN SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of -2.33%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 108.4% when compared to the same quarter one year prior, rising from $28.11 million to $58.58 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, CADENCE DESIGN SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Cadence Design Systems, Inc. develops, sells or leases, licenses, and maintains electronic design automation software, hardware, verification intellectual property (IP), and design IP for semiconductor and electronic system customers worldwide.You can view the full Cadence Design Systems Ratings Report or get investment ideas from our investment research center.