Stock Analysis on Net
Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

Price to FCFE (P/FCFE)

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Free Cash Flow to Equity (FCFE)

Cadence Design Systems Inc., FCFE calculation

US$ in thousands

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12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 28, 2019
Net income 1,041,144 848,952 695,955 590,644 988,979
Net noncash charges 406,810 305,397 299,205 329,695 (265,689)
Changes in operating assets and liabilities, net of effect of acquired businesses (98,778) 87,545 105,798 (15,417) 6,310
Net cash provided by operating activities 1,349,176 1,241,894 1,100,958 904,922 729,600
Purchases of property, plant and equipment (102,337) (123,215) (65,298) (94,813) (74,605)
Purchases of intangible assets (166) (1,000) (1,583) — —
Proceeds from revolving credit facility 50,000 585,000 — 350,000 150,000
Payments on revolving credit facility (150,000) (485,000) — (350,000) (250,000)
Proceeds from term loan — 300,000 — — —
Payment of debt issuance costs — (425) (1,285) — —
Free cash flow to equity (FCFE) 1,146,673 1,517,254 1,032,792 810,109 554,995

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Cadence Design Systems Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Cadence Design Systems Inc. FCFE increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Price to FCFE Ratio, Current

Cadence Design Systems Inc., current P/FCFE calculation, comparison to benchmarks

Microsoft Excel
No. shares of common stock outstanding 274,263,000
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands) 1,146,673
FCFE per share 4.18
Current share price (P) 299.63
Valuation Ratio
P/FCFE 71.67
Benchmarks
P/FCFE, Competitors1
Accenture PLC 23.43
Adobe Inc. 34.14
Autodesk Inc. 52.41
CrowdStrike Holdings Inc. 93.21
International Business Machines Corp. 11.48
Intuit Inc. 39.73
Microsoft Corp. 41.61
Oracle Corp. 64.30
Palo Alto Networks Inc. 61.13
Salesforce Inc. 40.22
ServiceNow Inc. 77.87
Synopsys Inc. 54.29
P/FCFE, Sector
Software & Services 41.88
P/FCFE, Industry
Information Technology 51.78

Based on: 10-K (reporting date: 2023-12-31).

1 Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Price to FCFE Ratio, Historical

Cadence Design Systems Inc., historical P/FCFE calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 28, 2019
No. shares of common stock outstanding1 272,239,000 272,940,000 277,336,000 278,974,000 280,168,000
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in thousands)2 1,146,673 1,517,254 1,032,792 810,109 554,995
FCFE per share3 4.21 5.56 3.72 2.90 1.98
Share price1, 4 300.74 185.70 135.21 133.16 71.39
Valuation Ratio
P/FCFE5 71.40 33.41 36.31 45.86 36.04
Benchmarks
P/FCFE, Competitors6
Accenture PLC 21.03 17.91 25.76 19.01 19.50
Adobe Inc. 41.83 21.32 34.26 41.36 41.90
Autodesk Inc. 25.55 16.66 64.43 24.07 41.92
CrowdStrike Holdings Inc. 42.65 99.63 41.38 880.68 —
International Business Machines Corp. 9.97 11.97 48.45 9.43 4.39
Intuit Inc. 38.74 13.86 86.74 17.36 34.61
Microsoft Corp. 43.32 36.73 42.54 42.74 30.77
Oracle Corp. 15.47 — 8.36 6.27 22.31
Palo Alto Networks Inc. 79.75 29.54 32.91 8.11 46.20
Salesforce Inc. 31.06 16.56 49.52 50.40 29.09
ServiceNow Inc. 58.13 44.44 64.54 49.83 68.98
Synopsys Inc. 57.04 33.41 40.55 45.07 77.64
P/FCFE, Sector
Software & Services 32.73 30.44 33.85 25.89 22.16
P/FCFE, Industry
Information Technology 33.47 26.69 27.52 23.46 19.14

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,146,673,000 ÷ 272,239,000 = 4.21

4 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.

5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 300.74 ÷ 4.21 = 71.40

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Cadence Design Systems Inc. P/FCFE ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.