Cadence Design Systems develops, sells, leases, and licenses electronic design automation software, emulation and prototyping hardware, verification intellectual property, and design intellectual property (design IP) for semiconductor and electronics systems industries worldwide. The company was founded in 1988 and is based in San Jose, California.
CDNS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Cadence Design Systems Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Cadence Design Systems Inc ranked in the 30th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Cadence Design Systems Inc ended up being:
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately merely 9.41% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
CDNS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 52.7% of tickers in our DCF set.
As a business, Cadence Design Systems Inc experienced a tax rate of about 4081% over the past twelve months; relative to its sector (Technology), this tax rate is higher than 99.48% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Cadence Design Systems Inc? See G, IT, STX, EBIX, and FN.