CDNS
Cadence Design Systems Inc
TMT, Industrial/Transportation
04/20/2015
Presented
| Date | 04/15/2015 |
| Price | $18.60 |
| Market Cap | $5.44B |
| Ent Value | $5.11B |
| P/E Ratio | 35.8x |
| Book Value | $4.57 |
| Div Yield | N/A |
| Shares O/S | 292.58M |
| Ave Daily Vol | 3,020,000 |
| Short Int | 9.94% |
Current
| Price | $269.47 |
| Market Cap | $73.79B |
| Cadence Design Systems, Inc. develops, sells, leases, and licenses electronic design automation (EDA) software, emulation and prototyping hardware, verification intellectual property (VIP), and design intellectual property (design IP) for semiconductor and electronics systems industries worldwide. It offers functional verification products, including logic verification software that enables customers to coordinate verification activities across multiple teams and various specialists for verification planning and closure; and system design and verification products for hardware-software verification, as well as for system power exploration, analysis, and optimization. The company also provides digital integrated circuits (ICs) design products, such as logic design products for chip planning, design, verification, and test technologies and services; physical implementation products for use in place and route, signal integrity, optimization, and double patterning preparation; and signoff products to signoff the design as ready for manufacture by a silicon foundry, as well as design for manufacturing products for use in the product development process. In addition, it offers custom IC design and verification products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and RF designs; and system interconnect design products to develop printed circuit boards and IC packages. Further, the company provides design IP products consisting of pre-verified and customizable functional blocks to integrate into customers SoCs; and VIP and memory models for use in system-level verification to model correct behavior of full systems interacting with their environments. Additionally, it offers engineering, methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company was founded in 1988 and is headquartered in San Jose, California. |
Publicly traded companies mentioned herein: Adobe Systems Incorporated (ADBE), Apple Inc (AAPL), Cadence Design Systems Inc (CDNS), LG Electronics Inc (066570 KS), Mentor Graphics Corp (MENT), Synopsis Inc (SNPS)
Highlights
The presenter is long shares of Cadence Design Systems (CDNS) and believes the stock is misunderstood on the sell side. Most of the Street analysts covering the company are semi cap equipment specialists, not software analysts, and CDNS makes software for semiconductor engineers to test and design chips. The issue is that the business model is similar to Adobe’s new per-seat subscription model, and semi cap equipment analysts have a different perspective on the industry than is necessary to appreciate the opportunity, in his opinion. CDNS has been winning new business, which is depressing results near term, and Lip-Bu Tan, CDNS’ president and chief executive officer, is an industry veteran with a good track record.
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