Cadence Design Systems Inc

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CDNS : NASDAQ : Technology
$25.57 up 0.14 | 0.55%
Today's Range: 25.38 - 25.71
Avg. Daily Volume: 2,494,200
08/26/16 - 4:00 PM ET

Financial Analysis


CADENCE DESIGN SYSTEMS INC's gross profit margin for the second 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 strong liquidity. Currently, the Quick Ratio is 1.52 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 23.03% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)453.02415.88
EBITDA ($mil)105.55107.12
EBIT ($mil)74.0277.59
Net Income ($mil)49.3458.16


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)704.32744.41
Total Assets ($mil)2377.872380.65
Total Debt ($mil)693.07348.73
Equity ($mil)1075.391397.22


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin92.3293.18
EBITDA Margin23.2925.75
Operating Margin16.3418.66
Sales Turnover0.750.69
Return on Assets10.848.27
Return on Equity23.9814.09
Debt Q2 FY16 Q2 FY15
Current Ratio1.72.02
Debt/Capital0.390.2
Interest Expense5.98.18
Interest Coverage12.559.49


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)292.34291.38
Div / share0.00.0
EPS0.170.19
Book value / share3.684.8
Institutional Own % n/a n/a
Avg Daily Volume2666602.02575792.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 59.15 for the Software industry and a premium compared to the S&P 500 average of 25.30. For additional comparison, its price-to-book ratio of 6.73 indicates a significant premium versus the S&P 500 average of 2.83 and a discount versus the industry average of 7.44. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, CADENCE DESIGN SYSTEMS INC proves to trade 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 29.13 Peers 59.15   CDNS 20.57 Peers 22.50

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

CDNS is trading at a significant discount to its peers.

 

Average. 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 valuation on par 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 18.34 Peers 49.38   CDNS 0.60 Peers 0.82

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 6.73 Peers 7.44   CDNS 32.81 Peers 18.23

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

CDNS is trading at a valuation on par with its peers.

 

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

CDNS is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CDNS 4.08 Peers 5.86   CDNS 7.56 Peers 5.40

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 significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CDNS has a sales growth rate that significantly exceeds its peers.

 

 

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