Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

$24.99

Price to Operating Profit (P/OP)
since 2005

Microsoft Excel

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Calculation

Cadence Design Systems Inc., P/OP, long-term trends, calculation

Microsoft Excel

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-29), 10-K (reporting date: 2006-12-30), 10-K (reporting date: 2005-12-31).

1 US$

2 Data adjusted for splits and stock dividends.

3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.


Share Price Trend
The share price exhibited notable volatility over the observed period. Initially, it declined sharply from $18.08 in 2006 to a low of $3.97 in 2009, reflecting a significant decrease. From 2010 onward, the share price recovered steadily, increasing almost continuously with notable acceleration after 2015. The data shows a dramatic rise from $71.39 in 2020 to a peak of $300.74 in 2024, followed by a slight decline to $258.34 in 2025. This overall trajectory indicates strong growth and increased market valuation in recent years.
Operating Profit Per Share (OPPS) Trend
Operating profit per share showed considerable fluctuations during the early years, including negative values in 2009 and 2010, indicating operational challenges and losses. After 2010, the OPPS returned to positive figures and demonstrated a persistent upward trend throughout the remaining period. The metric increased from $0.42 in 2006 to $4.93 in 2025, signifying improved operational efficiency and profitability over time.
Price to Operating Profit (P/OP) Ratio Trend
The P/OP ratio experienced substantial variation, particularly early in the period where it decreased from 43.13 in 2006 to 9.72 in 2008. Data is missing for some mid-period years, but from 2012 forward, the ratio generally increased, reaching a high of 65.43 in 2024 before slightly declining to 52.42 in 2025. This trend suggests mounting investor expectations and willingness to pay higher prices relative to operating profit in recent years.
Combined Insights
The initial phase marked by declining share prices and negative operating profits indicates a period of financial difficulty. The subsequent recovery in operating profit per share aligns with the gradual rise in the share price, reflecting strengthening company fundamentals. Notably, the sharp increase in share price in the last five years outpaces the growth in operating profit, as reflected by the rising P/OP ratios. This suggests that market valuation may be increasingly driven by future growth expectations or other factors beyond current operating performance. The slight correction in share price in the final year could imply market reassessment or increased volatility.

Comparison to Competitors

Cadence Design Systems Inc., P/OP, long-term trends, comparison to competitors

Microsoft Excel

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-29), 10-K (reporting date: 2006-12-30), 10-K (reporting date: 2005-12-31).