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Cadence Design Systems PE Ratio

: 71.92 (As of Today)
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The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). As of today (2021-11-29), Cadence Design Systems's share price is $178.36. Cadence Design Systems's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 was $2.48. Therefore, Cadence Design Systems's PE Ratio for today is 71.92.

Warning Sign:

Cadence Design Systems Inc stock PE Ratio (=71.92) is close to 10-year high of 75.85


The historical rank and industry rank for Cadence Design Systems's PE Ratio or its related term are showing as below:

NAS:CDNS' s PE Ratio Range Over the Past 10 Years
Min: 7.25   Med: 35.22   Max: 143.63
Current: 71.92

7.25
143.63

During the past 13 years, the highest PE Ratio of Cadence Design Systems was 143.63. The lowest was 7.25. And the median was 35.22.


NAS:CDNS's PE Ratio is ranked lower than
88% of the 257 Companies
in the Software industry.

( Industry Median: 29.20 vs. NAS:CDNS: 71.92 )

Cadence Design Systems's Earnings per Share (Diluted) for the three months ended in Sep. 2021 was $0.63. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 was $2.48.

As of today (2021-11-29), Cadence Design Systems's share price is $178.36. Cadence Design Systems's EPS without NRI for the trailing twelve months (TTM) ended in Sep. 2021 was $2.48. Therefore, Cadence Design Systems's PE Ratio without NRI for today is 71.92.

During the past 13 years, Cadence Design Systems's highest PE Ratio without NRI was 143.63. The lowest was 7.25. And the median was 35.22.

Cadence Design Systems's EPS without NRI for the three months ended in Sep. 2021 was $0.63. Its EPS without NRI for the trailing twelve months (TTM) ended in Sep. 2021 was $2.48.

During the past 12 months, Cadence Design Systems's average EPS without NRI Growth Rate was -35.60% per year. During the past 3 years, the average EPS without NRI Growth Rate was 42.40% per year. During the past 5 years, the average EPS without NRI Growth Rate was 33.70% per year. During the past 10 years, the average EPS without NRI Growth Rate was 17.50% per year.

During the past 13 years, Cadence Design Systems's highest 3-Year average EPS without NRI Growth Rate was 79.80% per year. The lowest was -60.10% per year. And the median was 13.45% per year.

Cadence Design Systems's EPS (Basic) for the three months ended in Sep. 2021 was $0.65. Its EPS (Basic) for the trailing twelve months (TTM) ended in Sep. 2021 was $2.53.


Cadence Design Systems PE Ratio Historical Data

The historical data trend for Cadence Design Systems's PE Ratio can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cadence Design Systems Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
PE Ratio
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 36.03 57.29 35.35 19.65 64.66

Cadence Design Systems Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
PE Ratio Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 27.70 64.66 58.54 56.30 61.06

Competitive Comparison

For the Software - Application subindustry, Cadence Design Systems's PE Ratio, along with its competitors' market caps and PE Ratio data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Cadence Design Systems PE Ratio Distribution

For the Software industry and Technology sector, Cadence Design Systems's PE Ratio distribution charts can be found below:

* The bar in red indicates where Cadence Design Systems's PE Ratio falls into.



Cadence Design Systems PE Ratio Calculation

The PE Ratio, or Price-to-Earnings ratio, or P/E Ratio, is a financial ratio used to compare a company's market price to its Earnings per Share (Diluted). It is the most widely used ratio in the valuation of stocks.

Cadence Design Systems's PE Ratio for today is calculated as

PE Ratio=Share Price/Earnings per Share (Diluted) (TTM)
=178.36/2.480
=71.92

Cadence Design Systems's Share Price of today is $178.36.
Cadence Design Systems's Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Sep. 2021 adds up the quarterly data reported by the company within the most recent 12 months, which was $2.48.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

It can also be calculated from the numbers for the whole company:


There are at least three kinds of PE Ratios used by different investors. They are Trailing Twelve Month PE Ratio or PE Ratio (TTM), Forward PE Ratio, or PE Ratio without NRI. A new PE Ratio based on inflation-adjusted normalized PE Ratio is called Shiller PE Ratio, after Yale professor Robert Shiller.

In the calculation of PE Ratio, the earnings per share used are the earnings per share over the past 12 months. For Forward PE Ratio, the earnings are the expected earnings for the next twelve months. In the case of PE Ratio without NRI, the reported earnings less the non-recurring items are used.

For Shiller PE Ratio, the earnings of the past 10 years are inflation-adjusted and averaged. Since it looks at the average over the last 10 years, Shiller PE Ratio is also called PE10.


Cadence Design Systems  (NAS:CDNS) PE Ratio Explanation

The PE Ratio can be viewed as the number of years it takes for the company to earn back the price you pay for the stock. For example, if a company earns $2 a share per year, and the stock is traded at $30, the PE Ratio is 15. Therefore it takes 15 years for the company to earn back the $30 you paid for its stock, assuming the earnings stays constant over the next 15 years.

In real business, earnings never stay constant. If a company can grow its earnings, it takes fewer years for the company to earn back the price you pay for the stock. If a company's earnings decline it takes more years. As a shareholder, you want the company to earn back the price you pay as soon as possible. Therefore, lower P/E stocks are more attractive than higher P/E stocks so long as the PE Ratio is positive. Also for stocks with the same PE Ratio, the one with faster growth business is more attractive.

If a company loses money, the PE Ratio becomes meaningless.

To compare stocks with different growth rates, Peter Lynch invented a ratio called PEG Ratio. PEG Ratio is defined as the PE Ratio divided by the growth ratio. He thinks a company with a PE Ratio equal to its growth rate is fairly valued. Still he said he would rather buy a company growing 20% a year with a PE Ratio of 20, instead of a company growing 10% a year with a PE Ratio of 10.

Because the PE Ratio measures how long it takes to earn back the price you pay, the PE Ratio can be applied to the stocks across different industries. That is why it is the one of the most important and widely used indicators for the valuation of stocks.

Similar to the PE Ratio without NRI or PS Ratio or Price-to-Operating-Cash-Flow or Price-to-Free-Cash-Flow , the PE Ratio measures the valuation based on the earning power of the company. This is where it is different from the PB Ratio , which measures the valuation based on the company's balance sheet.


Be Aware

Investors need to be aware that the PE Ratio can be misleading a lot of times, especially when the underlying business is cyclical and unpredictable. As Peter Lynch pointed out, cyclical businesses have higher profit margins at the peaks of the business cycles. Their earnings are high and PE Ratios are artificially low. It is usually a bad idea to buy a cyclical business when the PE Ratio is low. A better ratio to identify the time to buy a cyclical businesses is the PS Ratio .

PE Ratio can also be affected by non-recurring-items such as the sale of part of businesses. This may increase for the current year or quarter dramatically. But it cannot be repeated over and over. Therefore PE Ratio without NRI is a more accurate indication of valuation than PE Ratio.


Cadence Design Systems PE Ratio Related Terms

Thank you for viewing the detailed overview of Cadence Design Systems's PE Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.


Cadence Design Systems Business Description

Cadence Design Systems logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Traded in Other Exchanges
Address
2655 Seely Avenue, Building 5, San Jose, CA, USA, 95134
Cadence Design Systems was founded in 1988 after the merger of ECAD and SDA Systems. Cadence is known as an electronic design automation, or EDA, firm that specializes in developing software, hardware, and intellectual property that automates the design and verification of integrated circuits or larger chip systems. Historically, semiconductor firms have relied on the firm's tools, but there has been a shift toward other nontraditional "systems" users given the development of the Internet of Things, artificial intelligence, autonomous vehicles, and cloud computing. Cadence is headquartered in Silicon Valley, has approximately 8,100 employees worldwide, and was added to the S&P 500 in late 2017.
Executives
Teng Chin-chi officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Tan Lip Bu director, officer: CEO ONE CALIFORNIA STREET 28TH FLOOR SAN FRANCISCO CA 94111
Beckley Thomas P officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Wall John M officer: Sr. VP & CFO 2655 SEELY AVENUE SAN JOSE CA 95134
Mandava Surendra Babu officer: Sr. Vice President 47211 LAKEVIEW BLVD FREMONT CA 94538
Devgan Anirudh officer: President 2655 SEELY AVENUE SAN JOSE CA 95134
Zaman Aneel officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Bostrom Susan L director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BOSTROM SUSAN L a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Flaminia Alinka officer: Sr. VP, Chief Legal Officer 3975 FREEDOM CIRCLE SANTA CLARA CA 95054
Siboni Roger S director 1900 SOUTH NORFOLK STREET SAN MATEO CA 94403
Cowie James J officer: Sr. VP, General Counsel 2655 SEELY AVENUE BLDG. 5 SAN JOSE CA 95134
Chew Lewis director DOLBY LABORATORIES, INC. 1275 MARKET STREET SAN FRANCISCO CA 94103
Brennan Ita M director 5453 GREAT AMERICA PARKWAY SANTA CLARA CA 95054
Adams Mark director 834 TERRACE DRIVE LOS ALTOS CA 94024
Wilderotter Mary Agnes director 115 ALPINE TERRACE OAKLAND CA 94618

Cadence Design Systems Headlines

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