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Cadence Design Systems, Inc. – Software Publishers
Cadence Design Systems Inc. is a pivotal leader in electronic design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world's most innovative companies, delivering extraordinary electronic products from chips to boards to systems for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial and healthcare. For six years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For.
Analysis Results
Intrinsic Value $43.23
Latest Price $163.43
Relative Value 278% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 14.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 11.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 0.793 0.713
2023 0.909 0.735
2024 1.04 0.758
2025 1.2 0.782
2026 1.37 0.806
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 15.2 billion. This corresponds to a present value of 8.04 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.79 billion. Adding in the terminal value gives a total present value of 11.8 billion.

There are presently 274.0 million outstanding shares, so the intrinsic value per share is 43.23.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,715,769,000
Current Cash 1,088,940,000
Current Liabilities 971,225,000
Current Debt 0
Non-Cash Working Capital (NCWC) -344,396,000
Change in NCWC -97,743,000
EBIT 778,041,000
Tax Provision 72,480,000
Depreciation and Amortization 142,308,000
Capital Expenditure -66,881,000
Unlevered Free Cash Flow 682,338,946
Current Assets 1,478,587,000
Current Cash 928,432,000
Current Liabilities 796,808,000
Current Debt 0
Non-Cash Working Capital (NCWC) -246,653,000
Change in NCWC -38,395,000
EBIT 654,767,000
Tax Provision 42,104,000
Depreciation and Amortization 145,653,000
Capital Expenditure -94,813,000
Unlevered Free Cash Flow 623,642,822
Current Assets 1,169,343,000
Current Cash 705,210,000
Current Liabilities 672,391,000
Current Debt 0
Non-Cash Working Capital (NCWC) -208,258,000
Change in NCWC -17,070,000
EBIT 500,417,000
Tax Provision -510,011,000
Depreciation and Amortization 122,789,000
Capital Expenditure -74,605,000
Unlevered Free Cash Flow 531,531,000
Current Assets 951,092,000
Current Cash 533,298,000
Current Liabilities 708,982,000
Current Debt 100,000,000
Non-Cash Working Capital (NCWC) -191,188,000
Change in NCWC 78,764,000
EBIT 407,298,000
Tax Provision 30,613,000
Depreciation and Amortization 118,721,000
Capital Expenditure -61,503,000
Unlevered Free Cash Flow 510,153,153
Current Assets 979,988,000
Current Cash 692,542,000
Current Liabilities 642,398,000
Current Debt 85,000,000
Non-Cash Working Capital (NCWC) -269,952,000
Change in NCWC 31,865,000
EBIT 333,361,000
Tax Provision 110,945,000
Depreciation and Amortization 115,524,000
Capital Expenditure -57,901,000
Unlevered Free Cash Flow 305,454,282
Current Assets 702,034,000
Current Cash 468,289,000
Current Liabilities 585,562,000
Current Debt 50,000,000
Non-Cash Working Capital (NCWC) -301,817,000
Change in NCWC -19,087,000
EBIT 285,856,000
Tax Provision 34,067,000
Depreciation and Amortization 119,588,000
Capital Expenditure -53,712,000
Unlevered Free Cash Flow 291,581,819
Current Assets 964,761,000
Current Cash 711,184,000
Current Liabilities 536,307,000
Current Debt 0
Non-Cash Working Capital (NCWC) -282,730,000
Change in NCWC -61,267,000
EBIT 289,941,000
Tax Provision 15,179,000
Depreciation and Amortization 118,165,000
Capital Expenditure -44,808,000
Unlevered Free Cash Flow 285,584,511
Current Assets 1,851,735,000
Current Cash 1,022,606,000
Current Liabilities 1,393,091,000
Current Debt 342,499,000
Non-Cash Working Capital (NCWC) -221,463,000
Change in NCWC 13,878,000
EBIT 216,896,000
Tax Provision 22,104,000
Depreciation and Amortization 115,634,000
Capital Expenditure -39,810,000
Unlevered Free Cash Flow 280,110,617
Current Assets 1,221,091,000
Current Cash 633,048,000
Current Liabilities 1,148,210,000
Current Debt 324,826,000
Non-Cash Working Capital (NCWC) -235,341,000
Change in NCWC -29,256,000
EBIT 207,006,000
Tax Provision -5,247,000
Depreciation and Amortization 98,308,000
Capital Expenditure -44,929,000
Unlevered Free Cash Flow 231,129,000
Current Assets 1,391,235,000
Current Cash 827,061,000
Current Liabilities 1,217,270,000
Current Debt 447,011,000
Non-Cash Working Capital (NCWC) -206,085,000
Change in NCWC 55,876,000
EBIT 211,720,000
Tax Provision -251,677,000
Depreciation and Amortization 89,217,000
Capital Expenditure -35,966,000
Unlevered Free Cash Flow 320,847,000

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