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Here's How Much You'd Have If You Invested $1000 in Cadence Design Systems a Decade Ago
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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and 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 $3.562 billion in 2022.
The major product lines are as follows:
Functional verification products (26% of total 2022 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 (28%) 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 (22%) 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 (12%) offers Allegro system interconnect design platform, Sigrity analysis tools and OrCAD solution.
Under the IP segment (12%), 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 2022, the company derived 44.3% of revenues from United States, while the balance 55.7% came from its international operations.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Cadence Design Systems, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in November 2013 would be worth $21,265.21, or a 2,026.52% gain, as of November 15, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 151.07% and the price of gold went up 46.55% over the same time frame.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s Q3 performance is being driven by strength across all segments due to higher customer demand. Accelerated design activity owing to transformative generational trends such as generative AI, hyperscale computing, 5G and autonomous driving is likely to boost the top line going ahead. Management noted that comprehensive JedAI Generative AI platform was witnessing continued momentum, with sales of its GenAI solutions having nearly tripled in the last year. Frequent new product launches and strategic collaborations bode well. Cadence has increased revenue guidance for 2023 to $4.06-$4.1 billion compared with the previous view of $4.05-$4.09 billion. We expect the metric to be $4.08 billion. However, higher research & development costs, stiff competition and weakness prevailing over global macroeconomic conditions remain concerning
Over the past four weeks, shares have rallied 9.04%, and there have been 7 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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Here's How Much You'd Have If You Invested $1000 in Cadence Design Systems a Decade Ago
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and 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 $3.562 billion in 2022.
The major product lines are as follows:
Functional verification products (26% of total 2022 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 (28%) 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 (22%) 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 (12%) offers Allegro system interconnect design platform, Sigrity analysis tools and OrCAD solution.
Under the IP segment (12%), 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 2022, the company derived 44.3% of revenues from United States, while the balance 55.7% came from its international operations.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Cadence Design Systems, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in November 2013 would be worth $21,265.21, or a 2,026.52% gain, as of November 15, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 151.07% and the price of gold went up 46.55% over the same time frame.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s Q3 performance is being driven by strength across all segments due to higher customer demand. Accelerated design activity owing to transformative generational trends such as generative AI, hyperscale computing, 5G and autonomous driving is likely to boost the top line going ahead. Management noted that comprehensive JedAI Generative AI platform was witnessing continued momentum, with sales of its GenAI solutions having nearly tripled in the last year. Frequent new product launches and strategic collaborations bode well. Cadence has increased revenue guidance for 2023 to $4.06-$4.1 billion compared with the previous view of $4.05-$4.09 billion. We expect the metric to be $4.08 billion. However, higher research & development costs, stiff competition and weakness prevailing over global macroeconomic conditions remain concerning
Over the past four weeks, shares have rallied 9.04%, and there have been 7 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.