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If You Invested $1000 in Cadence Design Systems a Decade Ago, This is How Much It'd Be Worth Now
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Cadence Design Systems (CDNS - Free Report) ten years ago? It may not have been easy to hold on to CDNS for all that time, but if you did, how much would your investment be worth today?
Cadence Design Systems' Business In-Depth
With that in mind, let's take a look at Cadence Design Systems' main business drivers.
Based in San Jose, CA, Cadence Design Systems Inc. (CDNS - Free Report) offers products and tools that help customers to design electronic products. Through System Design Enablement (SDE) strategy the company offers software, hardware, services and reusable IC design blocks (IPs) to electronic systems and semiconductor customers.
Cadence’s core electronic design automation (EDA) software and services enable engineers to develop different types of ICs. Its design IP’s are directly integrated into the ICs.
System Connect tools and services are used for the design, analysis and verification of PCBs. Further, System Integration solutions aid in designing and analyzing systems as well as verifying system functionality.
Cadence reported revenues of $2.988 billion in 2021.
The major product lines are as follows:
Functional verification products (24% of total 2021 revenues) comprise four primary verification engines – JasperGold formal verification platform, Xcelium parallel simulation platform, Palladium Z1 enterprise emulation platform and Protium S1 FPGA-based prototyping platform.
Digital IC Design and Signoff (29%) offerings include Genus synthesis, Stratus high-level synthesis, Joules RTL power and Modus test solutions. Innovus implementation system is the company’s physical implementation offering. Tempus timing and Voltus power analysis, Quantus QRC extraction solutions, Physical Verification System and DFM are the signoff solutions.
Custom IC Design and Simulation (23%) includes the Virtuoso custom design platform. Virtuoso Advanced Node, Virtuoso Electrically Aware Design (EAD) and Spectre XPS FastSPICE Simulator are new products in the segment.
Systems Design & Analysis segment (11%) offers Allegro system interconnect design platform, Sigrity analysis tools and OrCAD solution.
Under the IP segment (13%), Cadence offers Tensilica DSPs, vertically targeted subsystems for audio/voice, baseband and vision/imaging applications, controllers and physical interfaces (PHYs) for standard protocols and analog IP.
In 2021, the company derived 43.3% of revenues from United States, while the balance 56.7% came from its international operations.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Cadence Design Systems a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2012 would be worth $15,034.24, or a 1,403.42% gain, as of August 15, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 204.45% and the price of gold increased 7.86% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s Q2 performance benefited from strength across all segments owing to healthy demand for the company’s diversified product portfolio. Frequent product launches and synergies from acquisitions are expected to help the company sustain top-line growth. In the second quarter, the company announced an agreement to acquire OpenEye Scientific Software which is expected to improve revenues by approximately $40 million in fiscal 2023. The company’s Palladium and Protium platform is gaining traction among clients in the hyperscale, AI/ML and server customers. Shares have outperformed the industry year to date. However, higher costs related to research and development are likely to dent margins in the near term. Supply chain disruptions, stiff competition in simulation market and significant forex volatility are other concerns.
Over the past four weeks, shares have rallied 20.27%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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If You Invested $1000 in Cadence Design Systems a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Cadence Design Systems (CDNS - Free Report) ten years ago? It may not have been easy to hold on to CDNS for all that time, but if you did, how much would your investment be worth today?
Cadence Design Systems' Business In-Depth
With that in mind, let's take a look at Cadence Design Systems' main business drivers.
Based in San Jose, CA, Cadence Design Systems Inc. (CDNS - Free Report) offers products and tools that help customers to design electronic products. Through System Design Enablement (SDE) strategy the company offers software, hardware, services and reusable IC design blocks (IPs) to electronic systems and semiconductor customers.
Cadence’s core electronic design automation (EDA) software and services enable engineers to develop different types of ICs. Its design IP’s are directly integrated into the ICs.
System Connect tools and services are used for the design, analysis and verification of PCBs. Further, System Integration solutions aid in designing and analyzing systems as well as verifying system functionality.
Cadence reported revenues of $2.988 billion in 2021.
The major product lines are as follows:
Functional verification products (24% of total 2021 revenues) comprise four primary verification engines – JasperGold formal verification platform, Xcelium parallel simulation platform, Palladium Z1 enterprise emulation platform and Protium S1 FPGA-based prototyping platform.
Digital IC Design and Signoff (29%) offerings include Genus synthesis, Stratus high-level synthesis, Joules RTL power and Modus test solutions. Innovus implementation system is the company’s physical implementation offering. Tempus timing and Voltus power analysis, Quantus QRC extraction solutions, Physical Verification System and DFM are the signoff solutions.
Custom IC Design and Simulation (23%) includes the Virtuoso custom design platform. Virtuoso Advanced Node, Virtuoso Electrically Aware Design (EAD) and Spectre XPS FastSPICE Simulator are new products in the segment.
Systems Design & Analysis segment (11%) offers Allegro system interconnect design platform, Sigrity analysis tools and OrCAD solution.
Under the IP segment (13%), Cadence offers Tensilica DSPs, vertically targeted subsystems for audio/voice, baseband and vision/imaging applications, controllers and physical interfaces (PHYs) for standard protocols and analog IP.
In 2021, the company derived 43.3% of revenues from United States, while the balance 56.7% came from its international operations.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Cadence Design Systems a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2012 would be worth $15,034.24, or a 1,403.42% gain, as of August 15, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 204.45% and the price of gold increased 7.86% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s Q2 performance benefited from strength across all segments owing to healthy demand for the company’s diversified product portfolio. Frequent product launches and synergies from acquisitions are expected to help the company sustain top-line growth. In the second quarter, the company announced an agreement to acquire OpenEye Scientific Software which is expected to improve revenues by approximately $40 million in fiscal 2023. The company’s Palladium and Protium platform is gaining traction among clients in the hyperscale, AI/ML and server customers. Shares have outperformed the industry year to date. However, higher costs related to research and development are likely to dent margins in the near term. Supply chain disruptions, stiff competition in simulation market and significant forex volatility are other concerns.
Over the past four weeks, shares have rallied 20.27%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.