Cadence Design Systems Inc

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CDNS : NASDAQ : Technology
$30.2 -0.04 | -0.13%
Today's Range: 29.69 - 30.2
Avg. Daily Volume: 1874300.0
02/17/17 - 4:00 PM ET

Financial Analysis


CADENCE DESIGN SYSTEMS INC's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. CADENCE DESIGN SYSTEMS INC has average liquidity. Currently, the Quick Ratio is 1.07 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 46.09% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)468.98441.08
EBITDA ($mil)110.75113.94
EBIT ($mil)80.8983.78
Net Income ($mil)38.4880.37


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)468.29711.18
Total Assets ($mil)2096.912351.02
Total Debt ($mil)693.49348.79
Equity ($mil)741.771376.12


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin89.3291.74
EBITDA Margin23.6125.83
Operating Margin17.2519.0
Sales Turnover0.870.72
Return on Assets9.6810.73
Return on Equity27.3718.34
Debt Q4 FY16 Q4 FY15
Current Ratio1.21.8
Debt/Capital0.480.2
Interest Expense6.364.2
Interest Coverage12.7119.95


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)278.1309.39
Div / share0.00.0
EPS0.140.26
Book value / share2.674.45
Institutional Own % n/a n/a
Avg Daily Volume1867910.01969058.0

Valuation


BUY. CADENCE DESIGN SYSTEMS INC's P/E ratio indicates a discount compared to an average of 52.26 for the Software industry and a significant premium compared to the S&P 500 average of 26.35. For additional comparison, its price-to-book ratio of 11.34 indicates a significant premium versus the S&P 500 average of 2.94 and a significant premium versus the industry average of 8.61. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, CADENCE DESIGN SYSTEMS INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CDNS 42.59 Peers 52.26   CDNS 18.90 Peers 22.80

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CDNS is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CDNS is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CDNS 20.16 Peers 58.04   CDNS 0.44 Peers 0.83

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CDNS is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CDNS trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CDNS 11.34 Peers 8.61   CDNS -13.42 Peers 37.37

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CDNS is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CDNS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CDNS 4.63 Peers 6.10   CDNS 6.69 Peers 7.50

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CDNS is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CDNS trails its peers on the basis of sales growth

 

 

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