CDNS Valuation

Cadence Design Systems Inc

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350.430

-3.86(-1.090%)1D

Overview
Forecast
Valuation
Earnings

CDNS Relative Valuation

CDNS's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, CDNS is overvalued; if below, it's undervalued.

Historical Valuation

Cadence Design Systems Inc (CDNS) is now in the Fair zone, suggesting that its current forward PE ratio of 47.92 is considered Fairly compared with the five-year average of 42.84. The fair price of Cadence Design Systems Inc (CDNS) is between 316.81 to 375.61 according to relative valuation methord.

Relative Value

Fair Zone

316.81-375.61

Current Price：348.54

Fair

47.40

Trailing

Forward

36.37

EV/EBITDA

Cadence Design Systems Inc. (CDNS) has a current EV/EBITDA of 36.37. The 5-year average EV/EBITDA is 32.05. The thresholds are as follows: Strongly Undervalued below 24.32, Undervalued between 24.32 and 28.18, Fairly Valued between 35.91 and 28.18, Overvalued between 35.91 and 39.78, and Strongly Overvalued above 39.78. The current Forward EV/EBITDA of 36.37 falls within the Overvalued range.

38.65

EV/EBIT

Cadence Design Systems Inc. (CDNS) has a current EV/EBIT of 38.65. The 5-year average EV/EBIT is 34.38. The thresholds are as follows: Strongly Undervalued below 26.34, Undervalued between 26.34 and 30.36, Fairly Valued between 38.40 and 30.36, Overvalued between 38.40 and 42.41, and Strongly Overvalued above 42.41. The current Forward EV/EBIT of 38.65 falls within the Overvalued range.

17.45

Cadence Design Systems Inc. (CDNS) has a current PS of 17.45. The 5-year average PS is 14.05. The thresholds are as follows: Strongly Undervalued below 10.01, Undervalued between 10.01 and 12.03, Fairly Valued between 16.08 and 12.03, Overvalued between 16.08 and 18.10, and Strongly Overvalued above 18.10. The current Forward PS of 17.45 falls within the Overvalued range.

57.60

P/OCF

Cadence Design Systems Inc. (CDNS) has a current P/OCF of 57.60. The 5-year average P/OCF is 43.18. The thresholds are as follows: Strongly Undervalued below 26.13, Undervalued between 26.13 and 34.65, Fairly Valued between 51.70 and 34.65, Overvalued between 51.70 and 60.22, and Strongly Overvalued above 60.22. The current Forward P/OCF of 57.60 falls within the Overvalued range.

64.25

P/FCF

Cadence Design Systems Inc. (CDNS) has a current P/FCF of 64.25. The 5-year average P/FCF is 47.40. The thresholds are as follows: Strongly Undervalued below 28.10, Undervalued between 28.10 and 37.75, Fairly Valued between 57.05 and 37.75, Overvalued between 57.05 and 66.70, and Strongly Overvalued above 66.70. The current Forward P/FCF of 64.25 falls within the Overvalued range.

Cadence Design Systems Inc (CDNS) has a current Price-to-Book (P/B) ratio of 19.28. Compared to its 3-year average P/B ratio of 19.40 , the current P/B ratio is approximately -0.59% higher. Relative to its 5-year average P/B ratio of 17.89, the current P/B ratio is about 7.78% higher. Cadence Design Systems Inc (CDNS) has a Forward Free Cash Flow (FCF) yield of approximately 1.64%. Compared to its 3-year average FCF yield of 1.71%, the current FCF yield is approximately -3.83% lower. Relative to its 5-year average FCF yield of 1.95% , the current FCF yield is about -15.98% lower.

19.07

P/B

Median3y

19.40

Median5y

17.89

1.64

FCF Yield

Median3y

1.71

Median5y

1.95

Competitors Valuation Multiple

The average P/S ratio for CDNS's competitors is 13.01, providing a benchmark for relative valuation. Cadence Design Systems Inc Corp (CDNS) exhibits a P/S ratio of 17.45, which is 34.15% above the industry average. Given its robust revenue growth of 20.25%, this premium appears sustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

CDNS.O

Cadence Design Systems Inc

CrowdStrike Holdings Inc

Palo Alto Networks Inc

12.14

15.84%

127.26B

Performance Decomposition

Market capitalization of CDNS increased by 30.31% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 62.27 to 94.70.

The secondary factor is the Revenue Growth, contributed 20.25%to the performance.

Overall, the performance of CDNS in the past 1 year is driven by P/E Change. Which is more unsustainable.

20.25%

1.06B → 1.28B

Revenue Growth

-42.01%

21.64 → 12.55

Margin Expansion

52.07%

62.27 → 94.70

P/E Change

30.31%