Cadence Design Systems Inc (CDNS, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $268.14 and a daily gain of 1.29%, despite a three-month change of -13.72%, the company shows promising signs of substantial growth. A detailed analysis, supported by the GF Score, positions Cadence Design Systems Inc for significant future success.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, assessing stocks based on five key valuation aspects from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Cadence Design Systems Inc boasts a GF Score of 97, reflecting its strong potential in the market.
- Financial strength rank: 8/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 7/10
Understanding Cadence Design Systems Inc Business
Cadence Design Systems is a leading provider of electronic design automation (EDA) software, intellectual property, and system design and analysis products. With a market cap of $73.42 billion and annual sales of $4.16 billion, the company plays a crucial role in automating the chip design process. This enhances design accuracy, productivity, and complexity in a comprehensive end-to-end solution. Cadence's extensive portfolio benefits from the convergence of semiconductor and systems companies, expanding its customer base and strengthening its market position.
Financial Strength Breakdown
Cadence Design Systems Inc's financial strength is evident in its robust balance sheet and impressive Interest Coverage ratio of 29.88, significantly above the benchmark set by Benjamin Graham. The company's Altman Z-Score of 17.01 further underscores its financial stability, while a Debt-to-Revenue ratio of 0.32 highlights effective debt management.
Profitability and Growth Metrics
The Profitability Rank of Cadence Design Systems Inc is outstanding, with an Operating Margin increase to 30.86% in 2023 from 21.42% in 2019. The company's Growth Rank is equally impressive, with a 3-Year Revenue Growth Rate of 16.1%, outperforming 66.73% of peers in the Software industry. This is complemented by a strong EBITDA growth, highlighting its expanding operational efficiency.
Conclusion
Considering Cadence Design Systems Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's unparalleled position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
