Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Current Valuation Ratios
Cadence Design Systems Inc., current price multiples
| Cadence Design Systems Inc. | Accenture PLC | Adobe Inc. | CrowdStrike Holdings Inc. | Fair Isaac Corp. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||
| Current share price (P) | ||||||||||||||||||||
| No. shares of common stock outstanding | ||||||||||||||||||||
| Growth rate (g) | ||||||||||||||||||||
| Earnings per share (EPS) | ||||||||||||||||||||
| Next year expected EPS | ||||||||||||||||||||
| Operating profit per share | ||||||||||||||||||||
| Sales per share | ||||||||||||||||||||
| Book value per share (BVPS) | ||||||||||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||||||||||
| Price to earnings (P/E) | ||||||||||||||||||||
| Price to next year expected earnings | ||||||||||||||||||||
| Price-earnings-growth (PEG) | ||||||||||||||||||||
| Price to operating profit (P/OP) | ||||||||||||||||||||
| Price to sales (P/S) | ||||||||||||||||||||
| Price to book value (P/BV) | ||||||||||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Cadence Design Systems Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 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).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio shows a fluctuating trend over the analyzed period. Starting at 62.89 in 2020, it decreased to 53.88 in 2021, indicating a reduction in market valuation relative to earnings. In 2022, there was a moderate increase to 59.7, followed by a significant rise to 78.64 in 2023, the highest point in the series. By 2024, the ratio declined to 67.09, remaining elevated compared to the earlier years. This pattern suggests varying investor sentiment and changing expectations about future earnings growth.
- Price to Operating Profit (P/OP) Ratio
- The price to operating profit ratio exhibits a somewhat similar pattern to the P/E ratio but with less volatility. It begins at 57.54 in 2020 and steadily declines to 48.13 in 2021 and 47.21 in 2022, reflecting an improved valuation relative to operating profit. However, in 2023, the ratio sharply increased to 65.43 before falling again to 52.42 in 2024. This indicates periods of optimistic pricing relative to operating performance, with some correction in the most recent year.
- Price to Sales (P/S) Ratio
- The price to sales ratio starts at 13.85 in 2020 and decreases to 12.55 in 2021, showing a slight valuation contraction relative to sales. It then increases to 14.23 in 2022, followed by a marked rise to 20.02 in 2023, representing peak investor valuation against sales during the period. In 2024, it retreats to 15.26, suggesting a normalization but still a relatively high market valuation in relation to sales.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio demonstrates considerable variation. Beginning at 14.9 in 2020, it declines moderately to 13.68 in 2021. Subsequently, it experiences a significant rise to 18.46 in 2022 and further to 24.05 in 2023, reaching the highest point observed in the data. This surge indicates strong market confidence in the company’s book value during this period. By 2024, the ratio decreases substantially to 15.15, indicating some revaluation but remaining above the initial levels.
- Overall Insights
- Across all valuation ratios, there is a general pattern of decline or stabilization from 2020 to around 2021, followed by notable increases peaking mostly in 2023, and partial reversals in 2024. The spikes in 2023 across all ratios may reflect heightened market optimism or favorable expectations about future financial performance. The subsequent reductions in 2024 point to correction or adjustment of those expectations. The elevated ratios in the later years imply continued strong valuation relative to earnings, operating profit, sales, and book value compared to the earlier years.
Price to Earnings (P/E)
Cadence Design Systems Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a general upward trajectory over the five-year period. Starting from $133.16 at the end of 2020, it saw a slight increase to $135.21 by the end of 2021. Thereafter, a more pronounced rise occurred, reaching a peak of $300.74 at the end of 2023. A subsequent decline followed in 2024, bringing the price down to $258.34, though it remained significantly higher than the initial value in 2020.
- Earnings Per Share (EPS) Trend
- The EPS demonstrated consistent growth throughout the period. Beginning at $2.12 in 2020, EPS rose steadily each year, reaching $3.85 by the end of 2024. The increments between years were relatively steady, indicating stable earnings growth.
- Price-to-Earnings (P/E) Ratio Trend
- The P/E ratio fluctuated notably during the timeframe. It began at a high level of 62.89 in 2020, dipped to 53.88 in 2021, then increased again to 59.7 in 2022. The ratio peaked sharply at 78.64 in 2023, followed by a reduction to 67.09 in 2024. These variations suggest changing market perceptions of the company’s valuation relative to earnings, peaking in 2023.
- Overall Insights
- The data indicates that the company's market valuation, as reflected in the share price, experienced substantial appreciation, particularly from 2021 through 2023, before a partial correction in 2024. Earnings growth was steady and positive, supporting the price increases. The elevated and fluctuating P/E ratios, especially the peak in 2023, suggest market optimism and possibly higher expectations for future growth at that time. The decline in share price and P/E in 2024 may reflect a reassessment by investors or market adjustments despite continued EPS growth.
Price to Operating Profit (P/OP)
Cadence Design Systems Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend from 133.16 US dollars at the end of 2020 to a peak of 300.74 US dollars by the end of 2023. However, this was followed by a decline to 258.34 US dollars in 2024, indicating some volatility after significant growth.
- Operating Profit per Share
- Operating profit per share increased steadily throughout the period analyzed, rising from 2.31 US dollars in 2020 to 4.93 US dollars in 2024. This represents more than a doubling of operating profit per share over the five-year span, reflecting improving operational efficiency or profitability.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio decreased from 57.54 in 2020 to a low of 47.21 in 2022, suggesting the share price was relatively undervalued compared to operating profit per share during this period. Nonetheless, it sharply increased to 65.43 in 2023, indicating a premium valuation, before falling again to 52.42 in 2024. This fluctuation mirrors the share price volatility and suggests varying investor sentiment or market conditions throughout the years.
Price to Sales (P/S)
Cadence Design Systems Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period under review. The share price exhibited an overall upward trajectory from 2020 to 2023, increasing significantly from $133.16 to $300.74. However, in the final year, there was a moderation with a decline to $258.34, indicating a potential adjustment or market correction after the sharp rise.
Sales per share demonstrated a consistent and steady growth throughout the entire period. The values increased from $9.62 in 2020 to $16.93 in 2024, reflecting a positive revenue growth trend on a per-share basis, which suggests effective business expansion or improved operational performance.
The price-to-sales (P/S) ratio initially decreased from 13.85 in 2020 to 12.55 in 2021, indicating a more favorable valuation relative to sales during that year. Subsequently, the ratio increased markedly, peaking at 20.02 in 2023, which signals a period where the market price outpaced sales growth, possibly reflecting heightened investor expectations or premium valuation. The P/S ratio then declined to 15.26 in 2024, aligning more closely with the upward trend in sales per share and indicating a partial reversion to a more balanced valuation relative to sales.
- Share Price Trends
- Overall growth with a significant peak in 2023 followed by a decrease in 2024.
- Sales Per Share
- Consistent annual growth throughout the period, demonstrating strengthening operational performance.
- Price-to-Sales Ratio
- Fluctuated, with an initial decline followed by a sharp increase and then a partial decline, indicating changes in market valuation relative to sales.
Price to Book Value (P/BV)
Cadence Design Systems Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial indicators reveals several notable trends over the five-year period.
- Share Price (US$)
- The share price exhibited an overall upward trajectory from 2020 to 2023, rising from $133.16 to a peak of $300.74, representing significant appreciation. However, in 2024, the share price experienced a decline to $258.34, indicating a partial retracement from the previous year's high.
- Book Value Per Share (BVPS) (US$)
- The book value per share showed a consistent increase across all periods, growing from $8.94 in 2020 to $17.05 in 2024. This steady growth suggests an improvement in the company's net asset base relative to the number of outstanding shares, reflecting strengthening equity fundamentals.
- Price to Book Value Ratio (P/BV)
- The P/BV ratio fluctuated considerably during the period. Starting at 14.9 in 2020, it decreased slightly in 2021 to 13.68, then surged sharply to a peak of 24.05 in 2023, before dropping to 15.15 in 2024. This volatility indicates changing market perceptions regarding the company's valuation relative to its book value, with premium valuation peaks coinciding with the highest share price levels.
In summary, the data reflect robust growth in the company’s book value per share and substantial appreciation in share price, particularly between 2021 and 2023, followed by a correction in 2024. The price-to-book ratio mirrors these dynamics, evidencing fluctuating investor sentiment and valuation multiples over the analyzed timeframe.