Cadence Design Systems logged a -5.1% change during today's morning session, and is now trading at a price of $202.03 per share.
Cadence Design Systems shares moved 40.5% over the last 52 weeks, with a high of $217.67 and a low of $132.32. During this time, the stock outperformed the S&P 500 index by 41.0%. As of January 2022, the company's 50-day average price is $203.0. Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The large-cap Technology company has 10,200 full time employees and is based in San Jose, CA. Cadence Design Systems has not offered any dividends in the last year.
The Company Has a Pattern of Improving Cash Flows:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $2,336 | $2,683 | $2,988 | $3,562 |
| Revenue Growth | n/a | 14.83% | 11.38% | 19.19% |
| Operating Margins | 21.4% | 24.4% | 26.0% | 30.2% |
| Operating Margins Growth | n/a | 14.02% | 6.56% | 16.15% |
| Earnings Per Share | $3.53 | $2.11 | $2.5 | $3.09 |
| EPS Growth | n/a | -40.23% | 18.48% | 23.6% |
| Diluted Shares (MM) | 281 | 280 | 279 | 273 |
| Free Cash Flow (MM) | $655 | $810 | $1,034 | $1,118 |
| FCF Growth | n/a | 23.68% | 27.65% | 8.08% |
| Capital Expenditures (MM) | -$75 | -$95 | -$67 | -$124 |
Cadence Design Systems Is Reasonably Valued:
Compared to the Technology sector's average of 27.16, Cadence Design Systems has a trailing twelve month P/E ratio of 65.4 and, according to its EPS guidance of 5.59, an expected P/E ratio of 36.1. Cadence Design Systems's PEG ratio is 6.83 based on its 9.6% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.
Cadence Design Systems's P/B ratio is 20.1 compared to its sector average of 6.23. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 700.8% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.81 * 10.067) = $25.23
Cadence Design Systems's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Cadence Design Systems Is the Subject of Mixed Market Indicators:
14 analysts are following Cadence Design Systems and have set target prices ranging from $200.0 to $235.0 per share. On average, they have given the company a rating of buy. At the current price of $202.03, CDNS is trading -7.78% away from its average analyst target price of $219.07 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 1.7% of the company's shares are tied to short positions. Institutions own 90.1% of Cadence Design Systems's shares, while the insider ownership rate stands at 0.95%. The biggest shareholder is Blackrock Inc. with a 12% stake in the company worth approximately $6,592,647,237.
