Current price levels represent good timing for the opening of new short positions with respect to shares in Cadence Design Systems, Inc.. The resistance zone around 371.03 USD could effectively set off a correction phase over the short term.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● From a short-term investment perspective, the company presents a deteriorated fundamental situation
● The company's MSCI ESG score, based on a ranking of the company relative to its industry, comes out particularly well.
Strengths
● Growth progress expectations are rather promising. Indeed, sales are expected to rise sharply in the coming years.
● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● Sales forecast by analysts have been recently revised upwards.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 87.89 times its estimated earnings per share for the ongoing year.
● Based on current prices, the company has particularly high valuation levels.
● The company appears highly valued given the size of its balance sheet.
● The company is highly valued given the cash flows generated by its activity.
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Cadence Design Systems, Inc. is No. 1 worldwide in developing and marketing design software for integrated circuits and electronic systems. Net sales break down by activity as follows:
- sale of licenses (91%): design software, integrated circuit verification, simulation, and performance control systems, etc. In addition, the group offers maintenance services;
- services (9%): consulting, training, system design and development, technical assistance, etc.
Net sales are distributed geographically as follows: the United States (43.6%), Americas (3.2%), China (12.8%), Japan (6.4%), Asia (19%) and Europe/Middle East/Africa (15%).
This super rating is the result of a weighted average of the rankings based on the following ratings: Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
This super composite rating is the result of a weighted average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), EPS Revisions (1 year), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite) and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be carried out. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of rankings based on the following ratings: Returns (Composite), Profitability (Composite) and Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully read the associated descriptions.
ESG MSCI
ESG MSCI
The MSCI ESG score assesses a company’s environmental, social, and governance practices relative to its industry peers. Companies are rated from CCC (laggard) to AAA (leader). This rating helps investors incorporate sustainability risks and opportunities into their investment decisions.