Cadence Design Systems to Repurchase $200M in Stock Under ASR Agreement
June 14, 2023
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Cadence Design Systems ($NASDAQ:CDNS), Inc., a leading provider of electronic design automation (EDA) software and engineering services, has announced that it will repurchase $200M of its stock under the terms of an Accelerated Share Repurchase (ASR) agreement with Goldman Sachs & Co. LLC. Cadence Design Systems is a publicly-traded company on the NASDAQ, specializing in digital integrated circuit design and providing design tools, services, and intellectual property (IP) to customers in the global electronics market. Cadence provides a comprehensive portfolio of design and verification tools to empower customers to create, test, and deploy their digital products faster and more efficiently.
Market Price
On Tuesday, CADENCE DESIGN SYSTEMS announced a stock repurchase program of up to $200M under an accelerated share repurchase (ASR) agreement. This announcement pushed their stock price up by 2.5% from the previous closing price of 233.2, opening at $240.2 and closing at $239.0. The ASR agreement is intended to reduce the company’s outstanding shares and increase the value of the remaining shares. Cadence Design Systems has recently seen strong growth in their semiconductor design and engineering services, making their stock a desirable buy for investors. This move is expected to further strengthen their position in the industry. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for CDNS. More…
| Total Revenues | Net Income | Net Margin |
| 3.68k | 855.42 | 23.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for CDNS. More…
| Operations | Investing | Financing |
| 1.17k | -754.43 | -593.72 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for CDNS. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.17k | 2.23k | 10.76 |
Key Ratios Snapshot
Some of the financial key ratios for CDNS are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.7% | 28.2% | 29.5% |
| FCF Margin | ROE | ROA |
| 28.3% | 23.9% | 13.1% |
Analysis
At GoodWhale, we examined the financials of CADENCE DESIGN SYSTEMS and generated a Star Chart. According to the chart, CADENCE DESIGN SYSTEMS is strong in growth and profitability, medium in asset and weak in dividend. We classify the company as a ‘gorilla’, which is a type of company that has achieved stable and high revenue or profit growth due to its strong competitive advantage. Given its strong performance, investors with long-term goals may be interested in such a company. CADENCE DESIGN SYSTEMS also has a high health score of 10/10, indicating its ability to safely ride out any crisis without the risk of bankruptcy. This makes it very attractive to investors who seek stability in their investments. More…
Peers
Cadence Design Systems Inc is one of the leading electronic design automation software providers. The company offers a comprehensive suite of tools, IP and services that enable global electronic system and semiconductor companies to create innovative products that improve the quality of life.
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Summary
Cadence Design Systems is a leading provider of digital design and verification platforms. Recently, the company announced a $200 million share repurchase program under an accelerated stock repurchase (ASR) agreement. This initiative is seen as a sign that management is confident in their outlook for the company and its ability to generate cash. Investors should take notice of this decision as it is an indication of confidence in the company’s fundamentals.
Furthermore, it may also lead to increases in share value as fewer shares outstanding should lead to higher earnings per share and a potentially higher stock price. Ultimately, this move could be beneficial for long-term investors, as it signals management’s bullish outlook on the company’s future prospects.
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