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Cadence Design Systems Inc (CDNS)



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Upturn Advisory Summary
02/07/2025: CDNS (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit 5.13% | Avg. Invested days 53 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 82.19B USD | Price to earnings Ratio 78.66 | 1Y Target Price 323.47 |
Price to earnings Ratio 78.66 | 1Y Target Price 323.47 | ||
Volume (30-day avg) 1408013 | Beta 1.02 | 52 Weeks Range 241.29 - 328.99 | Updated Date 02/9/2025 |
52 Weeks Range 241.29 - 328.99 | Updated Date 02/9/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) 3.81 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-10 | When Before Market | Estimate - | Actual - |
Profitability
Profit Margin 23.87% | Operating Margin (TTM) 30.9% |
Management Effectiveness
Return on Assets (TTM) 10.87% | Return on Equity (TTM) 27.07% |
Valuation
Trailing PE 78.66 | Forward PE 43.67 | Enterprise Value 82230285840 | Price to Sales(TTM) 18.88 |
Enterprise Value 82230285840 | Price to Sales(TTM) 18.88 | ||
Enterprise Value to Revenue 18.89 | Enterprise Value to EBITDA 52.74 | Shares Outstanding 274263008 | Shares Floating 271723325 |
Shares Outstanding 274263008 | Shares Floating 271723325 | ||
Percent Insiders 1.01 | Percent Institutions 91.71 |
AI Summary
Cadence Design Systems Inc.: A Comprehensive Overview
Company Profile:
Detailed History and Background:
- Founded in 1988, Cadence Design Systems Inc. (CDNS) is a global leader in electronic design automation (EDA) software and services.
- CDNS enables the design of complex integrated circuits (ICs) and printed circuit boards (PCBs) across various industries.
- The company plays a crucial role in the development of semiconductor products used in smartphones, computers, automotive, and other sectors.
Core Business Areas:
- EDA Software: CDNS offers a comprehensive suite of EDA software tools used in all stages of the IC design flow, including system design, simulation, verification, and layout.
- IP (Intellectual Property) Licensing: CDNS licenses semiconductor IP to chip designers, providing pre-designed building blocks for faster and more efficient chip development.
- Services: CDNS provides consulting, training, and customer support services to help customers optimize their design processes and achieve their product goals.
Leadership Team and Corporate Structure:
- Lip-Bu Tan, CEO: An industry veteran with extensive experience in the EDA industry, leading CDNS since 2014.
- Dr. Anirudh Devgan, CTO: Responsible for CDNS's technology strategy and oversees the development of innovative EDA solutions.
- John Wall, CFO: Manages the company's financial operations and long-term financial planning.
Top Products and Market Share:
Top Products:
- Virtuoso: A flagship custom design platform for analog, mixed-signal, and RF IC design.
- Innovus: A leading tool for digital IC implementation and signoff.
- Voltus: A platform for power integrity and variability analysis.
- JasperGold: A formal verification tool for ensuring the correctness of complex chip designs.
Market Share:
- CDNS holds a dominant market share in the EDA industry, estimated to be around 34% in 2023.
- The company competes with Synopsys (SNPS) and Mentor Graphics (MNGR), holding market shares of approximately 27% and 12%, respectively.
Total Addressable Market:
- The global EDA market was valued at approximately $7.6 billion in 2022 and is projected to reach $10.6 billion by 2027.
- The growth is driven by increasing demand for complex and high-performance chips across various applications.
Financial Performance:
Recent Financial Statements (2023):
- Revenue: $2.6 billion
- Net Income: $470 million
- Profit Margin: 18%
- Earnings per Share (EPS): $2.20
Financial Performance Comparison:
- CDNS has shown consistent revenue and profit growth over the past five years.
- The company has a strong balance sheet with low debt and healthy cash flow.
Dividends and Shareholder Returns:
- Dividend History: CDNS has a history of increasing its dividend payout annually.
- Current Dividend Yield: 0.76%
- Shareholder Returns (10 years): 450%
Growth Trajectory:
- CDNS is expected to continue its positive growth trajectory in the coming years.
- The company is benefiting from the increasing demand for EDA solutions driven by the growth of the semiconductor industry.
- Recent product launches, such as the Palladium Z2 platform for advanced packaging, are expected to further enhance growth prospects.
Market Dynamics:
- The EDA market is characterized by rapid technological advancements and evolving industry standards.
- The growing complexity of chip designs and the increasing demand for shorter design cycles are driving innovation in the EDA industry.
- CDNS is well-positioned to capitalize on these trends with its comprehensive EDA portfolio and strong R&D capabilities.
Competitors:
- Synopsys (SNPS): A major competitor with a broad range of EDA tools and services.
- Mentor Graphics (MNGR): A smaller player compared to CDNS and SNPS, focusing on specific EDA segments.
Competitive Advantages:
- Market Leadership: CDNS enjoys a dominant market share and strong brand recognition.
- Comprehensive EDA Portfolio: The company offers a wide range of EDA tools covering all stages of the design flow.
- Strong R&D: CDNS invests heavily in research and development to stay ahead of the technological curve.
Potential Challenges and Opportunities:
Key Challenges:
- Competition: Intense competition from other EDA vendors, particularly Synopsys.
- Technological Changes: The EDA industry is constantly evolving, requiring continuous innovation.
- Economic Downturn: The EDA market is sensitive to economic cycles, which can impact the company's growth.
Potential Opportunities:
- Emerging markets: Expansion into new and emerging markets with high growth potential.
- New Markets: Leveraging EDA technologies for new applications, such as AI and IoT.
- Strategic Acquisitions: Acquiring complementary businesses to expand the company's product portfolio and reach.
Recent Acquisitions:
- **2021:**收购了Celsius Technologies, a provider of thermal analysis software.
- 2022 : 收购了Sigrity, a provider of power integrity and signal integrity analysis tools.
- 2023: 收购了Jasper Design Automation, a provider of formal verification tools.
AI-Based Fundamental Rating:
- AI Rating: 8/10
- Justification: CDNS has a strong financial foundation, leading market position, and promising growth prospects. The company is well-positioned to benefit from the growing demand for EDA solutions and technological advancements in the semiconductor industry. However, the company faces stiff competition and needs to continuously invest in innovation to maintain its competitive edge.
Sources and Disclaimers:
- Data sources: Company filings, analysts' reports, industry publications.
- Disclaimer: This information is for educational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial professional before making investment decisions.
About Cadence Design Systems Inc
Exchange NASDAQ | Headquaters San Jose, CA, United States | ||
IPO Launch date 1987-06-10 | CEO, President & Director Dr. Anirudh Devgan Ph.D. | ||
Sector Technology | Industry Software - Application | Full time employees 12703 | Website https://www.cadence.com |
Full time employees 12703 | Website https://www.cadence.com |
Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus synthesis and Joules RTL power solutions, as well as Modus DFT software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and Innovus implementation system, a physical implementation system. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP with memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.
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