Cadence Design Profitability Analysis

CDNS Stock  USD 310.97  0.37  0.12%   
Considering Cadence Design's profitability and operating efficiency indicators, Cadence Design Systems is performing exceptionally good at the present time. It has a great chance to showcase excellent profitability results in April. Profitability indicators assess Cadence Design's ability to earn profits and add value for shareholders.
 
Net Income  
First Reported
1989-09-30
Previous Quarter
254.3 M
Current Value
323.9 M
Quarterly Volatility
172.1 M
 
Oil Shock
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, Cadence Design's Price To Sales Ratio is comparatively stable compared to the past year. Days Of Sales Outstanding is likely to gain to 82.24 in 2024, whereas Operating Cash Flow Sales Ratio is likely to drop 0.18 in 2024. At this time, Cadence Design's Change To Netincome is comparatively stable compared to the past year.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.640.8892
Way Down
Very volatile
For Cadence Design profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Cadence Design to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Cadence Design Systems utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Cadence Design's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Cadence Design Systems over time as well as its relative position and ranking within its peers.
  
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Is Cadence Design's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Cadence Design. If investors know Cadence will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Cadence Design listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.351
Earnings Share
3.83
Revenue Per Share
15.183
Quarterly Revenue Growth
0.188
Return On Assets
0.1474
The market value of Cadence Design Systems is measured differently than its book value, which is the value of Cadence that is recorded on the company's balance sheet. Investors also form their own opinion of Cadence Design's value that differs from its market value or its book value, called intrinsic value, which is Cadence Design's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Cadence Design's market value can be influenced by many factors that don't directly affect Cadence Design's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Cadence Design's value and its price as these two are different measures arrived at by different means. Investors typically determine if Cadence Design is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cadence Design's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Cadence Design Systems EBITDA vs. Shares Owned By Insiders Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Cadence Design's current stock value. Our valuation model uses many indicators to compare Cadence Design value to that of its competitors to determine the firm's financial worth.
Cadence Design Systems is number one stock in shares owned by insiders category among related companies. It is number one stock in ebitda category among related companies totaling about  1,733,710,784  of EBITDA per Shares Owned By Insiders. At this time, Cadence Design's EBITDA is comparatively stable compared to the past year.. Comparative valuation analysis is a catch-all model that can be used if you cannot value Cadence Design by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Cadence Design's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Cadence Design's earnings, one of the primary drivers of an investment's value.

Cadence EBITDA vs. Shares Owned By Insiders

Shares Owned by Insiders show the percentage of outstanding shares owned by insiders (such as principal officers or members of the board of directors) or private individuals and entities with over 5% of the total shares outstanding. Company executives or private individuals with access to insider information share information about a firm's operations that is not available to the general public.

Cadence Design

Insiders Shares

 = 

Executives Shares

+

Employees

 = 
0.82 %
Although the research on effects of insider trading on prices and volatility is still relatively inconclusive, and investors are advised to pay close attention to the distribution of equities among company's stakeholders to avoid many problems associated with the disclosure of price-sensitive information.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company operating cash flow based on data from the company income statement and is a very good way to compare companies within industries or across different sectors. However, unlike Operating Cash Flow, EBITDA does not include the effects of changes in working capital.

Cadence Design

EBITDA

 = 

Revenue

-

Basic Expenses

 = 
1.41 B
In a nutshell, EBITDA is calculated by adding back each of the excluded items to the post-tax profit, and can be used to compare companies with very different capital structures.

Cadence EBITDA Comparison

Cadence Design is currently under evaluation in ebitda category among related companies.

Cadence Design Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Cadence Design, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Cadence Design will eventually generate negative long term returns. The profitability progress is the general direction of Cadence Design's change in net profit over the period of time. It can combine multiple indicators of Cadence Design, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for 2024
Accumulated Other Comprehensive Income-94.8 M-90 M
Operating Income1.3 B1.3 B
Income Before Tax1.3 B1.3 B
Total Other Income Expense Net7.6 MM
Net IncomeB1.1 B
Income Tax Expense240.8 M252.8 M
Net Income Applicable To Common Shares976.3 MB
Net Income From Continuing Ops957.6 MB
Non Operating Income Net Other-4.9 M-4.6 M
Interest Income27.4 M28.8 M
Net Interest Income-8.9 M-9.3 M
Change To Netincome194.2 M203.9 M
Net Income Per E B T 0.81  0.61 

Cadence Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Cadence Design. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Cadence Design position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Cadence Design's important profitability drivers and their relationship over time.

Cadence Design Profitability Trends

Cadence Design profitability trend refers to the progression of profit or loss within a business. An upward trend means that Cadence Design's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Cadence Design's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Cadence Design Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Cadence Design different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Cadence Design in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Cadence Design's future profitability.

Use Cadence Design in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Cadence Design position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cadence Design will appreciate offsetting losses from the drop in the long position's value.

Cadence Design Pair Trading

Cadence Design Systems Pair Trading Analysis

The ability to find closely correlated positions to Cadence Design could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Cadence Design when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Cadence Design - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Cadence Design Systems to buy it.
The correlation of Cadence Design is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Cadence Design moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Cadence Design Systems moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Cadence Design can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

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When determining whether Cadence Design Systems is a strong investment it is important to analyze Cadence Design's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Cadence Design's future performance. For an informed investment choice regarding Cadence Stock, refer to the following important reports:

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When running Cadence Design's price analysis, check to measure Cadence Design's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Cadence Design is operating at the current time. Most of Cadence Design's value examination focuses on studying past and present price action to predict the probability of Cadence Design's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Cadence Design's price. Additionally, you may evaluate how the addition of Cadence Design to your portfolios can decrease your overall portfolio volatility.
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To fully project Cadence Design's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Cadence Design Systems at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Cadence Design's income statement, its balance sheet, and the statement of cash flows.
Potential Cadence Design investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Cadence Design investors may work on each financial statement separately, they are all related. The changes in Cadence Design's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Cadence Design's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.